Michael Bridgman

With the U.S. 10 year yield continuing to drop yesterday, the idea was to look for a short setup in the USDJPY and ride it down to as close to the 100.00 figure as it would be willing to go.   Rumours of intervention abound but will the level hold psychologically or with concerted government assistance?

Early in the UK session, the pair started to drop (with trend) and a short is taken.  Price descended to its Asian session low, through it and retested it. Price then moved through our Target 2 and retested this level for an hour.  With very tight profit stops all the way down, we awaited to see what would happen if the pair reached the 100.00 figure.  This is not going to be an easy level to get through and even if price breaks through it…it may snap upward quickly eroding profits.  Keeping very tight profit stops near 100.20 may prove to be prudent…but keep an eye on the 10 year yield.

The GBP keeps falling but the entry stops are quite pricey.  If you mistime your entry and your stop loss is hit a couple of times during the week…it will prove costly.  My preference it to find entries in other major pairs until I can get a stop loss of less than 25-30 pips in the GBP.  The early U.S. part of the session today was very rewarding for GBP shorts.

Good luck with your trading!   My preference is to let the larger charts show the direction and fine tune entries on the 15 minute.  Keep your stops tight and exercise good money management as always.

 

Choose the chart setups that make you feel comfortable.  The majors are aligning very nicely with a few nuances always to be aware of.

The U.S. traders were back today and there were some very nice moves to capture for traders.  Each time BOE Governor Carney speaks, it would appear the GBP goes down further.  It’s not like he can now say post Brexit that everything will now be okay afterall.  Traders are expecting Bank of England easing going forward.

Today shorting the EUR with a 15 pip stop loss for a potential 65 pips to our Target 2 looked very attractive.  The EUR remains very vulnerable to the USD.  A short is taken early in the U.S. part of the session as price came back in to close beneath its Asian high.  The EUR was looking very heavy today above 1.1150.  Price dropped through its Asian low quickly before pausing and retesting yesterday’s low and a very significant level on the Daily chart…classic price movement!  Price then descended to and just beneath our Target 2 where we closed the position at the UK close.

Note**** US 10 year yields traded below 1.40 for the first time since 2012 while trading at 1.8% through most of May.  With U.S. inflation near targeted areas, this does not bode well for the bond market.  With the U.S. 10 year dropping precipitously, we see the USDJPY moving in the direction of the 100.00 figure and possibly Brexit day lows.  Will the Japanese intervene?  Will the Japanese alone be able to stop the decline?  It’s all quite fascinating.  There is money to made this summer!

Good luck and enjoy your trading!

Two entries were found in the USDCAD today.

Overall traders have something to be excited about once again.  It was getting a little boring wondering whether or not Janet Yellen would provide the markets with any hint of the next U.S. interest rate hike and hearing the same rhetoric.  Now, the markets will be very active as a result of the Brexit vote with no one clearly understanding all of its potential repercussions.  It is important for traders to trade not what they think…but what they see and to trade in the context of the current market psychology…and for greater probability…with the trend.  The market psychology has just changed!

Although we are no further ahead in knowing when Janet Yellen will hint at the next raise of U.S. interest rates, we do know traders will be focused on taking less risk while trying to determine the current and longer term implications of Brexit and the E.U.’s future direction.  In short…trading just got very interesting again!  For anyone who was able to follow along in the Asian session last week as the Brexit votes came in… it was fascinating to watch.

Today as commodity currencies weakened to the USD, a long is taken in the USDCAD with a 17 pip stop loss for a potential 127 pips to our Target 2. As price reversed its Asian moves… we were able to find an entry as price closed bullishly back above its Asian low.  As price pulled back in the middle of its Asian range, our profit stop was hit to close our first trade.  As price advanced upward, we entered long again requiring a 27 pip stop loss for a potential 70 pips to our Target 2 with 3 hours left in our trading session.  When price resisted closing above Target 1, we tightened our profit stop and were taken out just under the Asian session high.

It’s nice to know that despite it being summer, the markets will be offering some great trading going forward.  One of the great things about trading is it rarely gets boring… for long.  Even when it is a little dull…opportunities exist to make money.

Good luck with your trading!

A subdued trading session as we end this trading week.  Get ready for what is likely to be a very exciting trading week… coming up with the Brexit vote.

After a big move yesterday, the USDCAD retraced a bit today with WTI strengthening.  In the U.S. part of the session WTI began to move upward and a USDCAD short is taken risking 22 pips for a potential 53 pips to our Target 2.   Price moved to the downside for 45 minutes and closed below our Target 1.  As we crossed our fingers hoping to get to Target 2, price moved upward leaving a second lower wick and closed bullishly.  We closed the trade before giving back any more.

 

Overall a  bearish week for oil with a likely close near the $48 a barrel area.

If you have been around the markets for awhile…you will have seen some extreme moves when the unexpected happens.  Next week is likely to be one of those weeks.  Be extremely cautious or remain on the sidelines.  Don’t get greedy but have fun.

Good luck with your trading and enjoy your weekend!

Very active markets today!  Lots of big moves and a very active Asian session for a number of the pairs.

It’s fairly easy to find a short in the EUR and the GBP these days, but be very nimble, keep your stop losses very tight and don’t get greedy!

A short trade is taken in the EUR as it stair-stepped downward early in the UK session.  An entry short is taken with a 20 pip stop loss for a potential 90 pips to our Target 2.  We didn’t didn’t want it to run any further or the stop loss would be too expensive.  This entry allowed for the EUR to dip below the Asian low and retrace upward without taking us out.  Price moved down in dramatic fashion to yesterday’s low and bounced above our Target 1 taking us out of the trade.

The GBP provided some good returns too, but it was more of an in-and-out and back in, active style of trading.   Be very careful trading the EUR and GBP at the moment.  It will get very interesting next week as the market further assesses the implications of “Brexit Bremain”.  If the UK votes to leave the EU, then other European countries will hold referendums too.

In the meantime the data dependent FOMC is not looking to raise interest rates for the moment and the USD had a strong bid tone today.  WTI is much lower this week and taking the Canadian dollar with it.

Good luck with your trading and be careful out there!

The USDJPY could not sustain above its Asian highs and although it traded sideways… the bias was to short it.  As the U.S. session approached, a short is taken with an 11 pip stop loss with a target of getting down near the May 5th low.  Our actual Targets 1 and 2 were 105.56 and 105.41 respectively.  We were not thinking it would go much lower than the May 5th low…particularly with the Bank of Japan potentially easing this week.

After the short is taken, we moved our stop loss to plus one pip in advance of the U.S. open.  Price picked up downside momentum as the U.S. session got underway and moved down to its Asian low… where it tested and retested the level before moving lower.  As price bottomed we tightened our profit stop further and were taken out on the bounce.

Although traders are very interested in hearing what Janet Yellen will say today and how optimistic she will sound… to determine if 2 rate hikes are still on the table for 2016, it will also be interesting to hear her comments on the last employment number.  The bigger concern for the market currently is the “Brexit Bremain” polls as the countdown continues to June 23rd.  Continue to be very cautious trading the EUR and GBP.

Good luck with your trading!