Archives for July 2020

As mentioned yesterday the Euro bulls are eyeing 1.2000 but we saw brief USD strength yesterday. It appears that the USD which has been sold sold sold of late may be attracting some buyers as we reach mid summer.

When the EURUSD could not extend above 1.1900 today a short was taken early in the U.K. session risking 24 pips for a potential 78 pips to our daily target at 1.1807.

Our first target was yesterday’s high, then the Asian session low and then to get down to our target just above the 1.1800 figure.

As price moved lower, we protected our profits and the long lower wicks began to form as price reached yesterday’s high. We closed the trade as price moved back to this level. This trade was countertrend as the market continues to be heavily weighted long in the pair since its move above 1.1500.

Next week the pair may reach 1.2000 but the climb is getting harder which may mean that we’re approaching the summit. Beneath the 1.1785 area will be revealing… as we see if the pullback attracts buyers on the dip. Some Euro bulls are targeting 1.2150 as resistance and further resistance at 1.2500.

A case for Euro strength and USD weakness to persist can be made, but I think caution is warranted around the figures as we watch price react.

Many years ago… a whale told me that if I had a very strong conviction on the direction of a pair… to go find another pair to trade. In other words, don’t get tunnel vision when you’re trading.

Good luck with your trading and enjoy your weekend!

In June, Federal Reserve Chairman Powell stated,  “We’re not even thinking about thinking about raising rates.” Yesterday he didn’t make any new quotable remarks. It appears that the Fed will be on hold for a very long time and the equity markets like it… and the USD moved lower.

Today after the U.S. economic news releases, a EURUSD long was taken risking 18 pips for a potential 67 pips to our daily target at 1.1825. Euro bulls are eyeing 1.2000 but above the 1.1800 figure met some selling today… and we closed the trade as it moved beneath.

Some heavyweight companies are reporting earnings today and this may lead the market tomorrow.

Interestingly the USD had moved upward today but couldn’t hold its gains and dropped yet again. Did the brief move higher suggest buyers are beginning to take long positions? At a certain point, the market which is extremely long the Euro will reverse course.

Equities will be entering their challenging months of August and September which historically have not been good ones since 1950.

With the exception of Roger Babson, I am not aware of anyone who can predict where the markets will be in the future with any accuracy. These are interesting times we live in and it’s highly unusual for the U.S. economy to have contracted to this extent and for the Euro area to outpace it.

Friday looks like it may be active as we end the month.

Good luck with your trading and stay healthy!

The USD which has moved sharply lower throughout the month of July had a bit of a reprieve today as we approach month end.

With sentiment being more cautious today after equites performed well on Monday, a short was taken in the USDJPY risking 15 pips for a potential 64 pips to our daily target at 104.88.

Price moved down with momentum to test its Asian session low, retested it and moved lower to test yesterday’s low. As we got close to the U.S. open price began to retrace and closed our trade.

Wednesday trading may be lighter in advance of the FOMC statement as traders await Chair Powell’s remarks regarding the state of the U.S. economy. Pending home sales and crude oil inventories will be released before the FED.

Good luck with your trading and stay healthy!

As the USD continues to weaken, the other majors strengthen to it – except the JPY today.

The USDCAD closed below a very important technical level on the daily chart Tuesday. Today the move continued lower after an initial run higher early in the U.K. session.

As the pair rolled over, a short was taken risking 17 pips for a potential 66 pips to our daily target at 1.3402. Price moved down through its Asian session high, through its Asian session low to test yesterday’s low… just as the U.S. session overlap began. Our profit stop was hit and we did not re-enter the second wave lower as the reward for risk did not meet our criterion.

U.S. equities continue to move higher with many investors optimistically focused on positive test results for the coronavirus vaccine. The confirmed infection rate in the U.S. continues to soar in the meantime. The lack of a new fiscal stimulus plan for the U.S. at this stage, continues to weigh on the dollar as does increased tensions between the U.S. and China.

The March 9th low is the next test for the USD.

Good luck with your trading!