Archives for September 2022

I’m combining two days of trading in one post due to time constraints.

The USD which has been very strong against other currencies finally had a couple of back to back days of weakness.

On Wednesday, the EUR found a bottom near .9535 just before the U.K. open, it then made two higher lows and two higher highs before the U.S. session began. As the pair began to move higher an entry was taken risking 27 pips for a potential 92 pips to our daily target at .9678. As this is a countertrend move, we watched price action closely as it reacted to an up-trendline and its Asian session high. Price continued to the upside as the USDX got weaker and weaker. Content to reach either yesterday’s high or our daily target before the U.K close, we exited the trade at .9678.

On Wednesday, the USD was weaker for a second day in a row and we took another long trade in the EURUSD. The pair had moved down in the Asian session, made a false breakout lower as the U.K. session got underway and reversed to test its Asian session high… where it failed and pulled back as the U.S. session got underway. After a bullish engulfing candle and a weakening USDX, a long was taken risking 32 pips for a potential 74 pips to our daily target at .9787. A technical level today at .9779 was also a level of concern if price couldn’t get through it. Fortunately price moved to our target just after the European close and our trade was exited.

Friday will be the last trading day of the month and quarter, so there may be extra volatility. With talk of central bank interventions, Japan last week and the U.K. this week, be careful with your stop losses. If the USD continues to weaken, the EURUSD could end up retesting par once again. Currently the pair although technically in a downtrend, could retrace up to .9900 with a softer USD.

Good luck with your trading!

The GBPUSD made a series of three lower highs today, one in each session, then it plunged to new lows… not seen in decades. After rejecting the 1.1100 level a short was taken as the U.S equity markets opened against a backdrop of a very strong USD.

Price made a faint bounce at the 1.0900 level as the European trading ended for the week and our profit stop was triggered.

As mentioned yesterday, there is a lot less uncertainty in the markets and the U.S. Federal Reserve has been very transparent in their interest rate strategy.

Good luck with your trading and enjoy your weekend!

In the month of September the U.S. Federal Reserve, the Bank of Canada, the European Central Bank and the Swiss National bank have all raised the interest rate by 75 bp. The Reserve Bank of Australia and Bank of England made 50 bp raises this month and the Reserve Bank of New Zealand made a 50 bp hike in mid August. Interestingly the Bank of Japan intervened in the currency market yesterday for the first time since 1998.

The EURUSD continues to trend lower and as it moved down today during the U.S. session. A short was taken risking 25 pips for a potential 55 pips to our daily target at .9806. In 2002, the EURUSD moved below .9400 and it could again. The USD continues to move higher and economic numbers continue to show the resilience of the U.S. economy – so far.

Our strategy is to continue to look for the lower highs after retracements and trade with the USD strength.

Although we didn’t make it all the way to our daily target we did manage to make it to yesterday’s low where our profit stop was triggered.

There is a lot of uncertainty out of the markets now and trading hopefully will be more rewarding.

Good luck with your trading!

The ECB raised interest rates by 75 b.p. yesterday with hawkish talk of more rate increases to come. Canada too had raised interest rates earlier in the week by 75 b.p. This helped the EURUSD move above par during the Asian session today.

As the U.K. traders started their trading day, the pair surged higher but looked heavy above the 1.0100 figure. As price began to move lower, approaching its Asian session high, a short was taken with a stop loss above the high of the day… with the thinking that price might move back down to retest par and potentially get to our daily target at .9992. Price made its way toward yesterday’s high as we awaited the U.S. session to get underway. Locking in profit before a new session begins is a useful practice, from my experience. On the first candle, our trade was closed for modest gains.

My condolences to the British on the passing of their monarch Queen Elizabeth II. She was always a very welcomed guest when she visited our country and by all accounts a lovely lady.

Good luck with your trading and enjoy your weekend!

Countertrend trades are tricky and tend to yield less in profit. If you haven’t mastered trading with the trend, then taking lower probability trades against the trend, should in my opinion be avoided. The market may be trending strongly as the USD has this year – making waves to the upside, but it won’t go up every day.

Today when the U.S. session got underway, the pair traded essentially sideways for the first hour bouncing above its Asian low area… up and down 15 pips or so. This range broke with a bullish candle higher just before the U.S. equity markets opened. A long was taken risking 23 pips for a potential 80 pips to our target at .9983. The pair moved higher, but couldn’t close above its Asian session high. It eventually pushed higher and we locked in some profit but allowed for another retest of the Asian session high. Price continued higher going into the European close enabling us to lock in more profit. After the first bearish candle we closed the trade ahead of the U.K. close.

On a day of USD weakness, we were hoping for a retest of par, but getting to our target level before the U.K. close would have been a great trade. If the pair moves above par, I am anticipating shorts entering around the 1.0050 area on renewed USD strength.

Good luck with your trading!

Britain has elected Liz Truss to be the new Prime Minister replacing Boris Johnson.

The U.S. economy remains very strong, as does inflation, which suggests another large rate increase from the Fed later this month.

The current trend for the GBPUSD is lower.

As the North American traders returned today after some August holidays and a long weekend, an entry short was taken after the first bearish candle close. We were willing to risk 20 pips for a potential 60 pips to our daily target at 1.1503.

Price pushed lower and we locked in profit in advance of the ISM Non-Manufacturing PMI release which took price to our target and beyond the 1.1500 figure.

Volumes will be picking up substantially this month.

Always be aware of the larger trends and don’t be blindsided by major economic news releases.

Good luck with your trading!