The event risk today was the U.S. NFP release. An hour after the release, the USDCAD moved convincingly lower and closed beneath the 1.2700 figure. A short was taken risking 20 pips for a potential 76 pips to our daily target at 1.2617.

The USD was weak today and the other majors were correlating accordingly. As the USDCAD moved lower, we moved our initial stop loss lower to lock in a positive trade and continued to lock in profit as the pair continued lower. The first area to get through was the 1.2650 level as this pair remains sensitive to both the figure and mid-figure levels.

As the U.K. session neared its close, the 1.2650 level was tested and the pair moved a little lower going into the close where we exited the position today. I personally like to be out of most positions by the U.K. close. The USDCAD however is an exception as it frequently completes its move during the North American session latter half. Today, I was content to exit the trade at the U.K. close.

Had the pair moved farther to the downside, the 1.2625 level is an important level from the daily chart and 1.2617 was our daily target.

I didn’t see anything that I liked this week until today. There is never a rush to take a trade, so if they don’t meet your trading criteria, wait for a higher probability setup.

Happy New Year and good luck with your trading!

Some days trading is much easier and more rewarding than other days. The USDCAD went sideways through the first half of the U.K. session and made a very brief attempt to move higher as the North American traders began trading. A double top formed and the USD began weakening to the majors… with the commodity pairs showing the most strength – consistent with “risk on” trading.

A short was taken risking 10 pips for a potential 77 pips to our daily target at 1.2831. Price was able to move beneath the 1.2900 figure and then through the 1.2879 level which was a technical level on the hourly chart. With price continuing lower, the pair would next test the 1.2850 level where we gave it bit of room as we continued to lock in profit. A doji candle with a long lower wick followed and we were taken out of the trade as price subsequently hit the doji candle high.

With a strong correlation between the majors today, a second trade was also taken in the EURUSD as it maintained strength above the 1.1300 figure. (not shown)

There are a number of U.S. economic releases on Thursday as we wrap up the trading week. Tomorrow will be the last trading day of the year for many traders. I will be watching the charts and if I see anything that I like, I will post it. Otherwise I will be back next week, but less inclined to trade during the holidays.

Happy holidays and stay healthy!

After a fearful Monday and a broad selloff in the major international equity indices, it was back to onward and upward today. Although the USD was not particularly strong today, the JPY was quite weak.

A long was taken early in the U.S. session overlap risking 8 pips for a potential 30 pips to our daily target at 114.10. The stop loss was placed just below Monday’s high. Although the pair managed to climb higher, there was a concern that the 114.00 level would hold… so locking in profit as price went in our direction was important.

Many trades the past couple of months have run less than 20 pips… with some exemptions. Trading has been more challenging and pullbacks without locking in profit can be very frustrating. Today as the USDJPY closed above our target the trade was closed. At this stage, I thought price would pull back to retest the 114.00 figure but it did not.

I will be around tomorrow looking for trades. If I catch a good one, I will post it. If not, I will be watching the markets next week, but expect they will be quieter going into year end.

Enjoy the holidays and stay healthy!

A number of years ago, a friend who manages a large hedge fund, told me that he liked to gauge risk sentiment with the AUDJPY pair. Like many traders, my preference has been the bond market… particularly the US 10Y yield. This gentleman who knew more about JPY trading than anyone I have ever met… before or since equated the AUD strength to risk and JPY strength to safety.

Today before we hear from Fed Chair Powell, I anticipated the currency markets to be like the calm before the storm. In other words, trading in a very tight range. What struck me as unusual was the AUD strength going into the U.S. session. Traders have every reason to be nervous going into the Fed’s potentially extremely volatile decision announcement.

When the AUDJPY failed to move higher and broke 81.35 – a level of interest on the daily chart, a short was taken risking 8 pips. The first level to get through was 81.14 followed by the 81.00 figure and 80.93. The idea was not to be greedy around the figure and any failure to break below 80.93 would likely result in a retest of the 81.00 level.

Further confirmation of the trade’s strength was evident in the CADJPY moving the same direction and the AUDUSD pushing lower in tandem.

On Thursday, the Bank of England, European Central Bank and the Swiss National Bank will announce their interest rate decisions.

Good luck with your trading!

As the North American session got underway the JPY and USD were strong and the commodity currencies weak.

The USDCAD and the CADJPY have been great pairs to trade this year. Today the USDCAD was too close to our daily target, but the CADJPY set up for an entry risking 15 pips for a potential 54 pips to our daily target at 88.43.

With a clear break of the 89.00 level, the next levels of concern were from the daily chart… 88.85 and 88.70 respectively, followed by the mid-figure 88.50. Price moved lower, briefly slowing down at the 88.85 and 88.70 levels before buyers came in just above the 88.50 mid-figure creating a retracement and closing the trade.

There are a number of central bank reporting this week to be aware of, with the U.S. Federal Reserve on Wednesday being very closely monitored by traders.

Good luck with your trading!

The USDCAD made waves to the downside but found buyers near its Asian session low. As price began to move higher a long was taken risking 20 pips for a potential 56 pips to our daily target at 1.2796. The first level to get through was the mid-figure which this pair respects. The second level was its Asian session high, followed by our daily target at 1.2796 – just below the 1.2800 figure.

I like to be done trading by the end of the UK session, but this pair represents 2 North American trading partners and it tends to continue to move during the North American business day. Today I decided to stay in an extra half hour but closed the trade when it failed to get above its Asian session high. This pair tends to move to our target most days… by the end of the day, but I don’t like to be in a trade if I can’t watch it.

I’m reminded of a story Mark Douglas tells about an excellent trader he was hired to coach years ago. This Chicago trader was technically excellent and other traders were in awe of how well he read the market each day. This trader had one flaw and it was costing him big dollars, so he hired Mark. It turns out in the last hour of this trader’s day, he tended to give back a chunk of his profit. Mark noticed that the trader’s focus waned in the last hour. In other words, if he quit an hour earlier, he wouldn’t be giving back his profits. What made the difference was simply calling it a day an hour earlier and banking his profits until the next day.

Good luck with your trading!