Michael Bridgman

Many market participants were expecting a slightly more hawkish tone from the Fed yesterday.  The result was USD weakness which extended into today.

After a tight range was made during the Asian session the European traders came on and bid the EUR up.  Anticipating that London would do the same as the U.S. did post FOMC, we entered long while we could still afford the stop loss.  The EUR made a quick surge upward – rested and made a second drive higher early in the session.  As there was no follow through after Target 1 was hit, we tightened our profit stop and we were taken out of the market on the next candle.

As we have moved the clocks forward in North America, we will be closing our trades by the European Close until Europe and the UK move theirs ahead later this month.

Good luck with your trading!

There have been numerous beautiful setups over the past 24 hours.  We can piggyback on the “risk on” trading mentality and post “Super Mario” temporary market euphoria, but we need to be very careful.  The EUR may find sellers emerging around 1.1250 next week and if not, it could run up to test 1.1375 – which would be telling.

The USDCAD was very telling today as WTI continued higher.  Despite a disappointing Canadian employment number the CAD moved with WTI strength and its ability to hold $38.

The rejection at the 1.33 figure which is very significant today, created a nice setup on the 15 minute chart.  With all the Cdn. news behind us, we entered short with a 25 pip stop loss for a potential 85 pips to our Target 2.  Price moved down vertically requiring tight and active profit stop placement along the way – as vertical moves are not sustainable and tend to reverse abruptly.  We gave price a little wiggle room at the significant levels – to retest and not to be greedy with little time left in the trading week, we exited at our T2.

In North America the clocks move ahead 1 hour this weekend for Daylight Savings Time.  In the UK and Europe, this is still 2 weeks away.

With the currency markets being very active, it remains very important to your trading success to use sound money management!  Pick setups that are very familiar to you and requiring the best R/R.

Lots of central bank news next week.

Good luck with your trading!

 

 

 

Concerns over Iran not agreeing to production freezes caused oil to weaken today.  This is turn caused the USDCAD to strengthen and with the USDJPY heading down – opportunity was found in the CADJPY cross.  This trade set up in the U.S. part of the session… while most traders were still focused on the Euro moves today.

With a 35 pip stop loss (JPY not USD) for a potential 106 pips to our Target 2, we entered short and watched to see how price would react at the Asian session low, as we entered short at yesterday’s high.  Price slices through it as the European markets close.  It then moved further down with only UK and the US traders active – closing at our Target 1.  We give it a little wiggle room and close at Target 2 – riding it down with WTI weakness and get out at our Target 2.

New Zealand lowered its rate yesterday… a move that had been expected for some time and discussed here earlier.

Mario Draghi topped expectations and the market went vertical with a near 400 pip move to the upside today.  Remember vertical moves are not sustainable… so I will be looking for a retracement setup with acceptable R/R… whether that is tomorrow or next week.

A quiet economic calendar for the U.S. tomorrow, but the CAD has some pending news and oil remains active and on everyone’s radar.

Good luck with your trading!

Back tomorrow if we find a trade.

 

 

 

The USDJPY had fairly subdued trading during the Asian part of the session before selling off early in the UK session.  As it reversed at a favourite time of the day, we entered long risking 19 pips for a potential 102 pips to our Target 2.  Price moved up to test the Asian session low, then began to climb higher as soon as the US session began.  As price continued higher, we locked in profits and got closed on the first pullback to our profit stop.

Tomorrow we have Mario Draghi and the ECB press conference and the US unemployment claims.

Good luck with your trading!

 

 

On Thursday the “risk on” theme in global markets continued.  Although my preference would be to short the GBP, if the market wants to buy it, then waiting for a high probability setup that allows for a small stop loss opportunity and a good R/R is going to be what I look for.  This setup offered a 25 pip stop loss for a potential 101 pips to our Target 2.

The setup also included a textbook “W” pattern with 3 lower lows on pullbacks coupled with a 3 candle reversal.  An entry could have been taken after the second higher low, but the stop loss was too rich for me…being that this was a countertrend trade.  Price began to move up nicely taking out the Asian high and moving above and closing above our T1.  We protected that level and after price went through our T2 level, we closed as the trade moved back to retest it.

This an a very good pattern to become familiar with and has high probability of success.  Knowing just a couple of patterns and being disciplined in waiting and trading them can lead to some very successful trading.  Practice is always the key, and this is best done in a demo account while you are learning and developing a track record of successful trades.  Learn how to read what the market is telling you, then learn how to trade it…but do not fall prey to gadgety indicators that will give you inconsistent results and erode your confidence.

Sentiment can change quickly in the markets, but understanding the context of the markets on any given day will enable you to be objective and look for clues as to how the flows are moving, and let you determine if entries make sense consistent with your trading plan.

Lots of economic news next week including releases from China the ECB press conference on Thursday.  I will be looking for EUR weakness.  Oil remains strong this week and hence part of the “risk on theme” globally that we have experienced this week.  This too can change which is why intraday trading appeals most to me.  I don’t like giving back gains as the sentiment swings back and forth from one day to the next.  In a beautiful trending market it makes more sense to position trade – to my way of thinking.

Enjoy your weekend and good luck with your trading.

Back Tuesday if we find a trade.

If you have any questions, please don’t hesitate to email me.

An overall bullish tone was consistent throughout the Asian markets.  Australia’s GDP beat expectations and the AUD soared higher immediately.  A bit of a pullback early in the European and UK session did not breach yesterday’s high.  After a second higher low, we entered long in the U.S. part of the session… once the news was out of the way – risking 15 pips for a 2:1 R/R.  Price moved up and through our targets.  At the first sign of a pullback to T2 we exited the trade.

Oil is continuing upward and remaining well above the key $30 level and despite the inventories buildup reported today – remains above $34.  Keep your eyes on the CAD and its crosses for entries consistent with disciplined R/R.

A divergence between the direction of the EURUSD and the GBPUSD made for an opportunity to short the EURGBP today with a beautiful setup.

Good luck with your trading!

Back tomorrow if we find a trade.