Forex Tips

As panic ensued following the collapse of Silicon Valley Bank, the U.S. government acted in order to protect the depositors and prevent the appearance of possible contagion in the banking system. Goldman Sachs over the weekend predicted the Fed will not raise interest rates next week as a result of the SVB insolvency.

The DXY started the trading week moving downward with bond yields plummeting, and a USDCAD short was taken risking 20 pips for a potential 43 pips to our first target at 1.3722. Price kept going down after it reached our target level, so we placed our profit stop lower. Our second target was the Asian session low around 1.3709 and expecting a bounce as we neared the figure at 1.3700 we closed the trade. Price continued lower without us… making a significant dip before retracing.

On Tuesday in the U.S. session, Core CPI will be a closely watched figure by traders. Britain has Average earnings and Claimant count change releases pending.

Good luck with your trading!

In June 2020 Chair Powell stated that the Federal Reserve was “not even thinking about thinking about raising interest rates”. Today he stated, “If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes. Restoring price stability will likely require that we maintain a restrictive stance of monetary policy for some time”.

With the resilience of the U.S. economy and plenty of data to suggest it’s still running “hot” long positions were taken in the USDJPY and USDCAD in advance of Powell’s remarks.

It didn’t matter which pair or pairs that you traded as long as you had your risk management correct and anticipated higher rates.

The USDJPY and USDCAD were beginning to move higher as was the DXY.

A long was taken on the USDJPY at 136.24 with a stop at 136.06 and a target area of 137.00

A long was taken on the USDCAD at 1.3669 with a stop loss at 1.3651 and a target area of 1.3729

The strategy was simple. Move to a 5 minute chart and watch the reaction. Fortunately, both pairs moved rapidly higher and the first move was to lock in some profit, the second move was to lock in more profit. The market took me out of both trades at the profit stops and the net was over 100 pips. Remembering the old Wall Street adage that “pigs get fat but hogs get slaughtered”, I was feeling very happy with the trades today.

A former student in England who loves trading the GBPUSD, shorted it at the London open and followed that profitable trade by shorting it again in advance of the Fed… netting over 160 pips today. Nick is an amazing trader who deserves every pip because he has worked so hard to get to this level. He’s very consistent, disciplined and keeps trading simple.

Good luck with your trading!

The EURUSD moved higher early in the London session, formed a lower high and began to move lower with momentum and some solid overhead structure.

A short was taken risking 15 pips for a potential 46 pips to our daily target at 1.0665. Price moved to its Asian session low, paused awaiting the U.S. economic releases then moved lower to our target area where we exited the trade.

Tomorrow we have four major U.S. economic releases early in the session – expect volatility.

Monday trading a GBP long was rewarding, but not quite a 2:1 reward for the risk, so I didn’t post it. Tuesday, I closed a long JPY trade too early for a minimal gain not liking the volatility.

We’ll find out tomorrow if the U.S. economy still continues its strong pace or if any cracks are appearing.

Good luck with your trading!

A very bullish candle above its Asian session low set up a long trade in the USDCAD risking 10 pips for a potential 75 pips to our daily target at 1.3455.

An hour before the U.S. session overlap often sees a retracement or profit taking. The USDCAD had been very quiet in the U.K. session and now looked liked it would extend to the upside. There were three technical barriers on the way to our target. The first was the 1.3400 figure followed by technical resistance at 1.3417 and 1.3440.

Price moved higher going into the U.S. open then traded sideways finding support at the Asian session high. It then caught a bid and moved to our third resistance area – from the 4 hr. chart – where it appeared over-extended. We closed the trade on the downtick to protect our profits.

Having given up profit yesterday on a EURUSD short and then getting stopped, I was not in the mood today to give back any profit or to trade the pair.

Thursday’s U.S. Initial Jobless Claims will be closely watched by traders.

Good luck with your trading!

A fairly light news day for economic releases to begin the week and the USD remained strong.

There was an initial move lower after the U.K. session got underway, followed by a pullback going into the U.S. session overlap. As the EURUSD began to move lower again, a short was taken risking 20 pips for a potential 77 pips to our daily target at 1.0680.

Price moved lower to the 107.25 area before some profit taking going into the European close. The final two candles of the U.K. session had the pair trying to extend beneath the 1.0725 level and we closed our trade as the U.K. session ended.

This was a fairly easy trade to enter as the hourly and daily charts already had confirmed downside momentum.

Good luck with your trading!

Since October 21st last year the USDJPY has been in a downtrend making lower lows and lower highs.

Today as the U.K. session got underway the pair moved lower, retested its Asian session low, before moving lower still, and as the U.S. session got underway, the pair retested its Asian session low one more time. A bearish engulfing candle followed and a short was subsequently taken risking 25 pips for a potential 75 pips to the 129.00 figure.

The pair moved down taking out the previous low of the day… then down near the 129.30 level but bounced 20 pips to retest 129.50. As the pair attempted to take out the 129.30 level once again, it bounced and the trade was closed as it moved above the previous candle’s low.

Good luck with your trading!