Michael Bridgman

I haven’t been posting trades lately because the market was pretty quiet the last 2 weeks of August and the first week of September was a shortened holiday week in North America with a holiday Monday and a NFP Friday.  I have made no more than one trade a week and preferred to be outside enjoying the last days of summer over staring at the screens searching for trade setups in a sleepy market.

This week most traders are back and getting excited about autumn trading.  There will be lots to rev up the market from here on.  The prospect of a September rate hike has once again been on the minds of traders and U.S. bonds have selling off.  The U.S. stock markets appear to be anticipating a rate hike and started to sell off last Friday.

Oil is moving downward and it looks like we could test the WTI $40 level again.

Gold looks like it could certainly test the $1300 area with anticipation of rate hike.

Of course, if the Fed sounds cautious as has been their track record this year and we hear only that  the case is strengthening for a rate hike as opposed to a rate hike, the USD is likely to sell off.  Fundamentals can change daily so it’s always important to be aware of pending major economic news but trading what you see from the technicals – especially with the trend is going to increase your probability of success.

Good luck with your trading!

A very quick selloff of the GBP at the London Open today.  Price then went sideways before attempting to climb and stay above its Asian low.  As price rolled over a nice short setup is found requiring an 18 pip stop loss for a potential 74 pips to our Target 2.  Price moved down, then went sideways without testing the Asian low before dropping just in advance of the US Open.  The USD was stronger today and as the U.S. session began the GBP sold off and hit our T2 where we gladly exited.

We will find out next week if the 1.3000 level can hold.  Brexit doesn’t seem to be having the negative impact the economists were predicting for the U.K., but the trend currently remains down for the GBP with the 1.3350 area being the top and 1.2875 area being the bottom of the current range.

Good luck with your trading and enjoy your weekend!

After the U.S. news today, WTI began to move up.  A short entry is taken on the USDCAD with a 19 pip stop loss for a potential 60 pips to our Target 2.  The first test was the Asian session lows and then… how the pair would react at the 1.2800 figure.  With a bit of patience and a continued up move in WTI the pair moved lower.  We tightened our profit stop after 2 wickie candles and got taken out shy of T1 for an acceptable gain.

Despite the U.S. economy doing very well, the USD has weakened.  Fundamentals and sentiment can change on a daily basis in these markets, so being able to read the technicals and trade in the direction of the trend…with the BIG money is the easier way to make pips.

I can think of a number of huge fundamental reasons why the EUR should be trading lower… but it’s not currently… and its trend has recently changed.

A quick review of the current Daily trend of the major pairs:

EURUSD Up

GBPUSD Down

USDJPY Down

USDCAD Down

AUDUSD UP

NZDUSD Down

WTI UP

A prudent trader will look at other time frames for confluence of trend and search for the best setups in those pairs.  When risk is assessed versus reward, which pairs stand out?  These are a couple of the numbers in the trader’s combination lock and a good place to start.

It’s August and trading is slower and less liquid due to summer holidays. I’m posting fewer trades as a result and getting fewer pips too.

Good luck with your trading!  Keep it simple and stay focused.

 

 

The JPY continued strength versus the USD was evident again today.   A countertrend move higher earlier in the session failed to sustain above the Asian high and a short was taken risking 13 pips for a potential 104 pips to our Target 2.  As price came down, we protected 10 pips of gain in advance of the U.S. pending news.  The worst cast scenario was for another dull day of trading for minimal pips.  Even had the numbers been good for the U.S. economy today, the JPY is the safest bet against the USD of the majors currently and we may see the 100.00 level tested soon.

The U.S. economic releases were all misses today and the USD weakened to the majors very quickly.  As the JPY penetrated our Target 1, we protected profits and closed the trade as soon as it came back above yesterday’s low…having gone through T2.

Summer trading requires patience and often the setups produce fewer pips.  Be selective and keep it simple!

Good luck with your trading!

Back next week.

A fairly straightforward trade with sellers entering the JPY at yesterday’s high.  After a reversal setup, a short is taken with trend as the pair makes a lower high early in the UK session – after a countertrend move in the Asian session.

Our first target was the Asian session low, then yesterday’s low and finally our Targets 1 & 2 which were 100.46 and 100.25 respectively.

As the pair slowed down in the U.S. part of the session, we closed the trade and call it a week.

With U.S. NFP tomorrow, we hope to see a number greater than 200K.

BOE Governor Carney delivered today with a “sledgehammer” as Britain said they had plans in place for a Brexit outcome and we heard phase 1. Congratulations to him for being firm!

Good luck with your trading!

 

I’m back from taking a week off from postings.  It is the middle of the summer and it’s nice to do other things too…like being outside.

The market last week was focused on the FOMC statement, the BOJ Outlook and finally a poor U.S. GDP number.  The bank stress tests over the weekend for Europe apparently passed, but some of largest European bank stocks are cratering.  If any of this inspires traders to be long the Euro and short the USD, we are happy to sit on the sidelines until the Euro fails to break through an important upside level and then ride it back down intraday.

Afterall, I’ve been waiting for a retest of the Brexit day low near 1.0900.  Yesterday’s high was quite telling and the selling today created a short once again.  A move to and below 1.1075 will be very bearish.  A retest and close above yesterday’s high will be bullish.  Whatever the market chooses to focus on any given day fundamentally, isn’t as important as being able to read the chart and determine the strength and direction of the trend.  The USD was weaker at the end of last week, but this doesn’t mean it makes sense to be long Euros or Sterling.

Of course, in the event of a weak NFP number on Friday the USD bears will be back with a vengeance.

Today, in the early part of the U.S. session, we found a EUR short setup requiring a 13 pip stop loss for a potential 41 pips to our Target 2.  When the trade couldn’t go below our Target 1, we closed it for acceptable gains in fairly quick trading.

The GBP has set up nicely several times in the past week but the stop losses are larger than I’m comfortable taking.

Good luck with your trading and keep it simple.