Michael Bridgman

This was a very simple trade setup that is countertrend and produced a small but quick return.  The thinking behind it was quite simple.  The USDJPY which is trending downward has come to test a very critical level.  Critical levels like to be retested and on the first test – often hold and produce a reversal setup.

The USDJPY at this stage needs to break the 110.00 figure and continue down to reinforce its trend…which is very strong at the moment…looking at the weekly, daily, 240 and 60 minute charts.

As it bounced today at 110.00 and began to move higher after the U.S. ISM Manufacturing PMI release, the U.S. dollar index confirmed a bid tone for a change.

The idea was to go long after the bounce with a 13 pip stop loss and ride price higher until the U.K. close…hopefully to the Asian high or higher.  Price had already fallen vertically and in many cases vertical moves are followed by reversals that tend to be vertical too.

In this case, price moved quickly higher and the trade was exited at the U.K. close for a modest amount of pips.  Countertrend trades tend to be less rewarding.  The market is not unidirectional and taking countertrend trades can be rewarding if done very cautiously – risking very little and keeping your profit stop tight.

Good luck with your trading!

There was not a lot of economic news today to drive the majors, but the continued USD weakness as the month of July comes to an end allowed the EURUSD to make another thrust higher.  The pair has moved very bullishly, taking out its August monthly high from 2015.  It has also closed above a very significant level on the weekly chart.

We entered long early in the U.S. session with a 16 pip stop loss for a potential 81 pips to our daily target at 1.1820.  As price moved up and stalled at the important weekly level, it appeared to be reversing and we closed the trade, just before price jumped another 40 plus pips.

Be cautious around the Manufacturing PMI releases for both Britain and the U.S. on Tuesday.

Good luck with your trading!

 

The USD has declined during July against the majors and the GBP is trying to close and stay above 1.3150.

Although the pair struggled in the first half of the U.K. session to get and stay above its Asian session highs, it moved higher after  a double bottom in the U.S. session overlap.  Once the pair was above the 1.3100 figure, it found support at 1.3115 before moving higher.  Our daily target was 1.3135. Price fell just shy of our target and we gave back about 16 pips as sellers entered before our profit stop was hit.

Although it’s been a tough July for the USD – U.S. exporters won’t be complaining.

The coming week’s event risks include the closely watched Non-Farm Employment number on Friday as a gauge of the world’s largest economy. The Bank of England’s rate decision and accompanying press conference on Thursday will also be very important. China’s manufacturing data and Australia’s rate decision begin the week and Euro zone inflation are all significant this coming week.

Good luck with your trading!

 

 

After a disappointing and dovish sounding FED statement yesterday – the USD moved down.  Today it strengthened.

As the U.S. session got underway after the economic news releases today,the GBPUSD made a familiar reversal setup.  A short was taken risking 16 pips for a potential 68 pips to our daily target. As price moved down vertically… a candle with a long lower wick formed within 5 or 6 pips of our target.  A long lower wick is usually followed by a move up as buyers have begun to enter…especially after a vertical move down.  As we were so close to our daily target and not wanting to give back pips to a reversal wave…we closed the trade at the European close.

Friday we will have Advance GDP numbers reported for Canada and U.S.

Good luck with your trading!

 

 

The USD last week was under pressure due to negative political headlines as opposed to negative economic surprises.  Increasing 10 year German bond yields this year have helped propel the Euro higher versus sideways and declining U.S. 10 year yields which have weighed on the USD.

The EURUSD was quiet in the early half of the U.K. session and then began to rise as the U.S. traders came online.  Price jumped higher and then began to roll over.  As price began to pull back, a short was taken risking 15 pips for a potential 67 pips to our daily target.  With 90 minutes left in the UK/US overlap, we didn’t expect to get to our daily target… but price moved quickly down completing its pattern where we exited as it bounced just before the end of our session.

With any countertrend trade it’s always a good idea to take smaller position sizing and keep stops tight.

Tomorrow the FED is not expected to announce any new policy measures.  The market has also cooled considerably on when the next rate hike is to be expected.

The Aussie dollar will be closely watched with RBA Governor Lowe’s speech on Wednesday.

Good luck with your trading!

Despite traders focused on the BoJ outlook and ECB President Mario Draghi’s attempts to sound dovish to keep the Euro lower, it was political headlines in the U.S. that sank the USD today.  Headlines come and go, but with the continued animosity between the (“fake news”) media and President Trump, the USD didn’t fare well today.

A short setup in the trending USDCAD attracted our attention while most eyes were on the EUR and the JPY.

It’s always refreshing when a trade moves quickly to one’s target without a retracement wave along the way.

Note: The EUR has solid upward momentum at the moment and above 1.1800 will be technically very significant.  Continue to be vigilant of price activity around the figures.

Good luck with your trading!