Archives for September 2020

USD strength has continued for a third day going into the non-farm payroll release tomorrow.

Earlier in the week the ECB’s chief economist Lane commented that the ECB does pay attention to the exchange rate. This has brought some Euro shorts into the market in advance of the ECB meeting next week.

With the majority of the market caught off side, the EURUSD has been pulling back. In August the pair had two pullbacks in the 200 pip range. With 1.2000 rejected on Tuesday, many bulls will continue to remain long above 1.1800. A close below 1.1800 and another close below 1.1750 may cause the tide to change abruptly… with capitulation ensuing and a potential domino effect.

Today a short was taken in the higher octane EURJPY cross as upside momentum faded… risking 20 pips for a potential 100 pips to our daily target at 1.2483.

Price moved lower but left a long lower wick after the first candle, so we removed the risk from the trade by placing our profit stop to plus 2 pips. Price continued lower but bounced at its Asian session low and we closed the trade after giving back 13 pips.

Trading the higher octane JPY crosses requires a great deal of discipline and money management as the stop and reverses occur frequently and abruptly. The last time I traded the AUDJPY was during the early and extremely volatile days of the pandemic and my stop loss was hit in about 30 seconds after my entry. The market has calmed down considerably since then but these pairs tend to be volatile.

All eyes will be on the U.S. Non-farm payroll tomorrow, so be cautious and nimble if you’re trading in advance of it.

Good luck with your trading!

The USD continued to attract more bears than bulls this summer during July/August and this was especially notable in the EURUSD move. In August the pair tried twice to close above 1.2000 but failed. The GBPUSD has also moved up and the Sterling bulls continue to anticipate a close above 1.3500.

Fresh back from vacation this week, and to start the month of September, my attention was on the USDCAD which was finding buyers near the 1.3000 figure as it tried to push lower in advance of the U.S. session.

A long was taken risking 18 pips for a potential 59 pips to our daily target at 1.3069 as price moved off its lows of the day to stay above 1.3000.

As price began to move higher, we removed the risk from the trade by locking in profit in advance of the U.S. economic news releases. The better than expected ISM Manufacturing PMI helped the USD move higher.

September has arrived and we are just over a couple of months away from the U.S. election on November 3rd. The market volumes will pick up as traders begin to return from summer holidays. The Nonfarm Payroll release will be out on Friday and next Monday will be a holiday in North America.

Keep an eye on the big numbers for clues to USD strength and weakness.

Good luck with your trading!