Michael Bridgman

As the market digested President Trump’s speech yesterday and awaited today to see if Fed Chair Powell would add anything new, risk sentiment was cautious.

After the USDJPY tried to move above its Asian session high, and failed, a short was taken risking 12 pips for a potential 36 pips to our daily target at 108.67. Price moved down to test its Asian session low and bounced 10 pips higher before making a new wave lower to our daily target.

This pair appears to be moving in a channel between 108.50 and 109.50 at the moment. Look for buyers near 108.50 and sellers near 109.50.

in the U.K. election developments, P.M. Johnson’s Conservatives continue their lead over the Labour party as the prime minister promises to end the Brexit “groundhoggery” and deliver Brexit. In the meantime the pair appears to be trading between 1.2780 to 1.3000. Keep stops tight as the range continues.

The EURUSD continues to test the 1.1000 level where buyers have been entering. A continued break below, particularly after a retest of 1.1000 opens the 1.0900 and 1.0800 levels for shorts.

Good luck with your trading!

The EURUSD continued lower today as the USD strength continued. The USDX sustained move higher above current support at 98.00 is bullish as we go into the weekend.

The question today was whether or not the EURUSD would test the 1.1000 figure. As it moved lower beneath its Asian session low, a short was taken risking 8 pips for a potential 37 pips to our daily target at 1.1003. As the candles developed long lower wicks, as buyers entered, we locked in profit and our profit stop closed the initial trade. It’s very common to see a retracement in advance of the U.S. open.

As the U.S. session got underway, we went short again risking 8 pips for a potential 26 pips to our daily target. The trade was closed at the U.K. close for an overall modest return.

The current move higher for the USD and U.S. 10 year yields is attributable to the optimism regarding the U.S. – China trade talks phase one being signed… and both sides making concessions in the meantime. If either side scuttles the agreement, we will see an abrupt reverse in the current “risk on” sentiment.

In the meantime, the USDJPY is trading with a very high correlation to risk on sentiment as measured by the moves of the S&P index…and this correlation also extends to JPY crosses. Understanding correlations is a very powerful tool for any trader.

Enjoy your weekend and good luck with your trading!

The currency markets have calmed down after a very reactionary and volatile several months. In my opinion, the markets are looking much more tradeable now. The U.S. – China trade agreement although not yet signed is looking like phase one will now be signed in December.

The U.K. election is still over a month away. With the Bank of England rate decision, meeting minutes, and Governor Carney’s press conference today, it felt safe to take a short on the GBPUSD before the event. It seemed highly unlikely there would be a rate change so close to the election. Risking 15 pips for a potential 40 pips to our daily target at 1.2815 – an entry short was taken. It paid off well and quickly, but I can understand why many traders would prefer to wait until after the announcement and conference before jumping in.

The GBPUSD has been trading between 1.2800 and 1.3000 recently. A break lower opens up a test for 1.2700 and 1.2650. A break higher above 1.3000 will likely test 1.3075.

The EURUSD set up for a nice short today as it pushed lower early in the U.S. session overlap, after failing to find buyers above its Asian session high. We entered short risking 10 pips for a potential 30 pips to our daily target at 1.1042.

A continued move lower will have difficulty getting through the 1.1000 figure. Any sustained moved beneath 1.1000 and 1.0925 then 1.0880 area become technical targets.

Good luck with your trading!

Risk appetite has returned this week, with both the U.S. and China progressing forward to signing the phase one agreement this month. This has caused the USD to move higher with each whisper of good news regarding the positive developments. Similar to Brexit, it’s not done yet but it’s moving in the right direction.

Today as the the EURUSD failed to close above its Asian session high, a short was taken risking 11 pips for a potential 41 pips to our daily target at 1.1088. Price moved down to its Asian session low and retested this level as the U.S. session was about to get underway. Price then continued downward and we exited at our target level of 1.1088.

It’s looking like it could be a good week for trading. The USD is at a technically significant level, so we will see if it pulls back or not tomorrow. Gold pulled back significantly today as we would expect with the strong USD momentum. The EURUSD will likely find some buyers at the technically important 1.1000 level… if it continues lower from here.

Good luck with your trading!

After a second failed attempt to rise above its Asian session high, and a bearish engulfing candle, a short was taken on the EURUSD risking 11 pips for a potential 44 pips to our daily target at 1.1121.

There were a number of U.S. economic news releases today so we tightened our stop loss to prevent getting closed by volatility. Price moved lower taking out yesterday’s high and the its Asian session low. As price continued lower we tightened out profit stop more to prevent giving back too much and it was hit closing our trade.

Tomorrow we have Non-Farm Payrolls which tends to make for volatility but recently not as much as in previous years. Much like FOMC days, I prefer to trade after the release or take the day off.

U.S. – China trade talks continue to progress positively currently. Britain will have a Dec.12th general election, so Brexit will remain unresolved for the time being. The USD has given back most of its gains from last week. We will find out tomorrow if the October 18 low will hold.

Be careful tomorrow and good luck with your trading!

The USDJPY was fairly subdued in trading until the U.S. session got underway where we chose a long entry risking 7 pips for a potential 22 pips to our daily target at 108.98.

There was a little bit of up and down as price moved toward our target, but price continued to make higher lows on shallow pullbacks. This pair tends to move from figure to figure on active days and it currently is running into resistance just above 109.00 today. If the risk on sentiment continues then be very careful at 110.00 which is a very important level.

It will be a very busy week with interest rate decisions by a few central banks. The market is pricing in a 90% probability of a 25 bp cut by the Fed. The U.K. is poised for a general election announcement with a date to be determined in December. Phase 1 of the U.S. – China trade talks continues to look viable this week, and on Friday we will have Nonfarm payroll.

Hold on to your hats and good luck with your trading!