Michael Bridgman

It was a holiday in North America yesterday and the U.S. traders came back today looking to make some money.  With a strong USD and the GBP continuing to look weak, a short was taken after a reversal set up early in the U.S. overlap.  The stop loss was larger than I initially like, but the R/R was greater than 3:1 and trades can be closed before a stop loss is hit.

The pair moved down quickly, briefly bounced for a candle at T1 before moving down to test the figure and closed our position at T2 …for a great start to the week.

Mark the low of the flash crash last week and look for the GBP to test this level in the near term.  I have a lower target still based on the MSML from the Daily chart.  My concern is that everyone else is short the GBP, so protect your profits along the way and I will be looking for opportunities to fade any waves to the upside.

The EUR is looking very precarious as traders are focused on the condition of the European banking system, the effectiveness of the ECB and politics in general.

It could be a fun week.

Good luck with your trading!

 

 

 

The GBPUSD continues to drops further making new lows, most days.  On days that it moves up, keep your eyes on the candles for the roll over and if you find an acceptable R/R entry, a short can be rewarding.  Today as it rolled over, we found an entry risking 20 pips for a potential 74 pips to our Target 2 giving us a greater than 3 to 1 R/R.  Price came back at is once giving us no more than 5 pips of heat before tumbling much lower – taking out the Asian low and yesterday’s low without looking back.  As price pierced through out Target 2, we protected the level and chose to close the trade after the next candle moved up… with our daily target realized.

 

Looking at a MSML on a daily chart, we can see that price could drop further in days to come.  Keep in mind that although the market is preoccupied with the cost of Brexit, it will shift its attention away from Britain to Europe, Japan and the U.S. in any given week and on any given day.  The GBP shorts will be squeezed eventually.

It’s best to focus on the technicals, but be aware of the markets’ sentiment toward the fundamentals.  Trade what you see, not what you think makes fundamental long term sense.

Keep your stops tight and protect your profits by moving your profit stop to lock in profits as the market moves in your favour.

Friday will be NFP in the U.S. so traders will use the number to determine how soon an interest rate hike is likely.  To avoid the volatility associated with NFP we will keep out of the market until next week.

Monday is a holiday in North America.

Good luck with your trading and enjoy your weekend!

 

Nothing like a little debate between presidential candidates to move the markets.  I’m not really sure why, but it had an effect and approximately 82 million viewers watched it.

The EUR started to move down after earlier luring in breakout short traders.  After a retracement the pair set up nicely and began to move back down.  A short is taken with a 12 pip stop loss for a potential 50 pips to our Target 2.

Price moved down but had difficulty getting through the 1.1200 figure.  As it bounced up from our Target 1, we closed the trade choosing not to give back any more pips at a critical level that could hold.

Lots of economic news tomorrow including Core Durables, Yellen testifying, Draghi speaking and Crude Oil inventories.

Good luck with your trading!

After making waves to the downside through the Asian session today, the GBP continued to sell off as the U.K. session got underway.  We found a short entry just above the important 1.3000 figure.  In a fairly quiet trading week… due to the announcements on Wednesday by Japan, the US Fed and New Zealand, trades have been harder to find.

Although the risk/reward on this trade wasn’t very good, the GBP has been trending downward and the short setup was the most attractive one that I saw today.  As price quickly moved down to our Target 2, we exited the trade, and missed a further move during the U.S. part of the session. The GBP sold off in all 3 sessions today as a hard Brexit landing has been the focus this week.

With a U.S. rate increase now unlikely before December ( at the earliest), traders can focus on the pending U.S. election outcome and what its implications may be for the markets.  Hopefully the markets will pick up once again and produce more trade setups for us.

Good luck with your trading and enjoy your weekend!

 

 

The idea to short the GBP today was to risk no more than 27 pips for a potential 95 pips to our Target 2.  Although the market is short the GBP, the idea was to try to ride it down to the 1.3000 level and watch it closely to see if it could go lower.  The risk… although a little higher than I like at 27 pips could be reduced as the trade moved lower.  Price moved down to the Asian session lows then broke and headed for yesterday’s low.  We removed the risk from the trade by locking in 22 pips.  As price retraced upward after the large drop, our profit stop is hit taking us out of the trade.  Price subsequently completed a “3 Drives” pattern coming within 2 pips of our T2 … without us.

All eyes are on the Bank of Japan and U.S. Fed now.   The market does not expect an interest rate hike tomorrow from the Fed.

Good luck with your trading!

Retail sales and PPI were soft today and the USD weakened as traders’ expectations of a rate hike next week by the Fed diminished further.

The USDJPY rolled over – unable to find buyers above the Asian high and a countertrend short trade was taken with a 17 pip stop loss.  The idea was for the pair to move down and test the the Asian session lows before the UK Close.  This was a late session trade and the 102.35 level was challenging to break through.  Once price broke it with 15 minutes left in the session, it opened the door to the downside but we exited at the UK Close.

Friday the market will be watching closely at the CPI numbers and the U of M Consumer Sentiment for further hints as to rate hike expectations.

Good luck with your trading!