Michael Bridgman

Although the stock markets were up nicely today and the U.S. 10 year yield was up significantly… gold and the USD were up modestly.

As the USDJPY attempted to move above its Asian high and failed, we went short risking 10 pips for a potential 60 pips to our daily target.  Price moved lower and pushed down hard on any buyers as evidenced by the long upper wicks early in the U.S. session.  When the first long lower wick appeared… as price tested its Asian session low, we tightened our profit stop and the subsequent candle closed the trade.

On Friday we have ECB’s President Draghi speaking, followed by Canadian inflation numbers and U.S. building permits.

Good luck with your trading!

 

The environment today is one of safety or “risk off”.   The U.S. economic releases met expectations keeping the USD flat overall.  The U.S. 10 yr yield dropped heavily and curiously gold was unable to make any headway again today.

The NZDUSD had a countertrend move to the upside today and reached our upside target before fading after the US releases.  Having exceeded our upside target we waited for the pullback and shorted the pair…which also coincided with the trend on the larger charts.  The 60 minute chart was particularly revealing today.  With a 10 pip stop loss for a potential 47 pips to our downside target the R/R was very attractive.

Daily ranges appear to be expanding a bit this week, so let’s hope the trend continues.  Unemployment releases from Australia and the U.S. are on deck… along with retail sales from Britain and Governor Carney speaking on Thursday.  With the risk off environment watch for money flows to the JPY.

Good luck with your trading!

A USDJPY short set up today as politics continue to slow down the U.S. tax reform proposal.  An entry short was taken risking 9 pips for a potential 56 pips to our daily target.

Price moved down testing its Asian high, then yesterday’s high, before descending to test and retest its Asian low.  Price then continued lower at the U.S. open but reversed and closed our trade – hitting our profit stop before making another wave lower.

Wednesday brings numerous economic releases… so be aware of the potential volatility around them and trade accordingly.

Good luck with your trading!

 

The NZDUSD has been an active pair lately and despite hawkish comments from the RBNZ, we were able to find a nice short setup today.  Price tried to climb above yesterday’s high but was unable to remain above.

We entered short with an 11 pip stop loss for a potential 57 pips to our daily target.  Price hesitated at our entry, but did not retest yesterday’s high.  It then began to drop and plummeted right through its Asian low.  This level will typically be retested and sure enough price began to move up…hitting our profit stop and closing our trade.

The USD remains on its backfoot again today as politics and tax reform undermine its strength.

Good luck with your trading!

The market currently remains focused on the U.S. tax reform and it remains a mystery as to how much reform will eventually happen.  In the meantime the USD is having difficulty getting traction to the upside.

President Trump was elected a year ago and it’s interesting to look at how the financial markets have reacted over this period.  The USD has appreciated 8% to the JPY, depreciated 5% to the EUR and depreciated 6% to the GBP.  Overall, the USDX is down 3%, US 10 year yields up 45 bp and the S&P is up 21 percent.

All countries have their issues and it’s always curious as to what and for how long the markets will tend to focus on or disregard the issues.

Trading lately for me has been slower than usual and the daily trading ranges have been tighter than usual for this time of year.

The NZDUSD set up for me yesterday and the USDJPY today, but both trades had very modest returns.

The USDJPY has been making a series of lower highs since Monday and as it began to roll over today, an entry short was taken near yesterday’s low…risking 13 pips for a potential 45 pips to our daily target.  Price continued lower but when a long lower wick appeared just before the U.S. open, we chose to place our profit stop just above the high of the candle and we were closed immediately for a modest gain.

On Tuesday, the NZDUSD set up for a short trade as it failed to stay above its Asian lows an hour before the U.S. open.  The risk of 9 pips for a potential 35 pips to our daily target was an attractive R/R.  The market lately has had some attractive setups, but the reward for the risk has not been conducive to my style of money management.  As the U.S. session got underway and price dropped… we were almost stopped out protecting less than 5 pips.  Fortunately we were not and price continued lower before forming a long lower wick. We moved our profit stop lower.  Price reversed on the next candle and we were once again closed at our profit stop for very modest gains.

When trading is slow for a period of time, we still need to stick to our trading plan.  If trades set up nicely, we can take them, and if not, we come back the next day and hope to see something that we like.

There have been a lot of mixed signals lately which makes conditions more difficult to trade.

Good luck with your trading!

Mario Draghi didn’t surprise the market with his remarks today.  The USD was stronger against all the majors.  President Trump spoke highly of Janet Yellen yesterday and the markets continues to speculate as to who will be announced as the next FED chairperson.

Once the dust had settled today, we chose to short the AUDUSD as it rolled over at its Asian highs – risking 15 pips for a potential 46 pips to our daily target.

As price moved below it’s Asian low, long lower wicks began to form and we tightened our profit stop in case price reversed.  Price began to move up in the last hour of the U.K. session and we were taken out of the trade.

On Friday, there is some U.S. economic news and the question is whether the USD strength will continue going into the weekend.

Good luck with your trading!