Forex Tips

The USD strength continued today and an entry long was taken in the USDCAD early in the U.S. session overlap – risking 20 pips for a potential 54 pips to our daily target at 1.2723.

Buyers began entering near the Asian session low as the U.S. session got underway. Price then made a new session high (our entry point) before moving higher to test both its Asian session high and yesterday’s high. It then surged up and through our target price. As price rose above the mid-figure, sellers emerged. After two candles with long upper wicks we exited the trade.

If the DXY can continue higher, a test of the March 31st high and August 20th high will be closely watched by traders.

Enjoy your weekend and good luck with your trading!

We have moved into the second half of September now and daily trading ranges continue to be much tighter than usual. September so far, looks a lot like August. The GBPUSD and the USDCAD continue to be my favourite two pairs to trade because they offer the best daily ranges of the major pairs. With oil continuing to trend higher, the CAD crosses also offer good trading ranges.

With a very strong U.S. dollar today, an entry long was taken in the USDCAD after the first round of economic news releases in the U.S. session… risking 20 pips for a potential 61 pips to our daily target at 1.2707.

As price moved higher approaching the 1.2700 figure, sellers emerged and the pair closed bearishly lower, leaving a long upper wick and we exited the trade.

With the current trading ranges being tighter than usual, it can be trickier to find trades that run more than 20 pips. With that in mind, money management is always critical to a trader’s success.

Currently, I like to use a smaller risk percentage per trade with a slightly larger stop loss. That may sound contradictory, so this is what I mean… instead of risking 1% on a trade, I will often risk less, for example .5% per trade. When the ranges are constricted, I don’t want a large institution to be able to move the market enough to take me out easily because my stop loss is too close to the market when I enter… so if I normally am comfortable with a 15 pip stop loss, I may opt for 20 pips when I first enter. Avoid trading at low volume times of the day too, so you will be less vulnerable to being stopped out.

It’s a tricky market currently, but it is tradeable and trading the more active major pairs is a safer way to trade it.

Remain disciplined and patient.

I don’t publish trades that are under 20 pips, but I have had a lot of them lately and they add up.

Good luck with your trading and be nimble!

August was the slowest month I’ve seen in over 17 years of currency trading. I think my best trade was for 21 pips but the majority were in the 1 to 15 pip range.

I am happy September has arrived and the volume and ranges will pick up from here. Who knows perhaps Jerome Powell will finally tell us when the bond tapering will begin.

Oil was up today and the Canadian dollar was strong. After the U.S. economic releases and a declining DXY, a short was taken in the USDCAD risking 15 pips for a potential 39 pips to our daily target at 1.2554. Finally a trade that moved quickly… and to our target. The CADJPY was also a good trade today.

Friday will bring the Non-Farm Payroll release which tends to be the catalyst for abrupt moves. When I trade this event it is with pending orders and only if price is not too volatile just in advance of the release. Otherwise, I will wait and trade the pullback after the reactionary burst when the market is settling down.

It’s a long weekend in North America with Monday being the holiday.

Enjoy your weekend and good luck with your trading!

On Wednesday the DXY moved up to test its July 21st high at 93.19 and failed to move higher leaving a double top. Today the DXY moved lower after the Michigan Consumer Expectations and Michigan Consumer Sentiment economic releases – which were both large misses.

The sentiment today was bearish as the DXY was unable to remain above 93.00… which opened up its fall for a test of the swing high from March 9, 2021 at 92.50.

The USDJPY had moved lower as the U.K. session got underway and traded beneath its Asian session low and yesterday’s low for the first half of the session. A short was taken at 110.25 with the intention of getting down to just above the important 110.00 figure. This required a stop loss of 9 pips for a potential 21 pips to our daily target at 110.04.

I find this pair tends to move quite well in the U.S. session but today’s setup looked inexpensive to enter and had it only moved down to our daily target, I wouldn’t bother to write this one up.

Fortuitously after the disappointing Michigan releases, the pair not only moved down to our target, it took out the 110.00 figure and kept descending. We moved our profit stop to protect our target level and kept tightening it down, exiting the trade at the U.K. close.

A trade in any of the majors against the USD could have been rewarding today and Fridays remain a favourite trading day for me.

Enjoy your weekend and good luck with your trading!

As the U.S. session got underway the USDCAD made an attempt to move higher but was unable to test its Asian session high or yesterday’s high. It began to fade and a short was taken risking 13 pips for a potential 55 pips to our daily target at 1.2518.

Price moved lower to its Asian session low – where a more conservative entry was available. The pair continued lower and moving through yesterday’s low, but came back up to retest the level leaving a long lower wick. Not wanting to give back too many pips after a nice move lower, we tightened our profit stop and the trade was closed the next candle.

U.S. Core CPI will be closely watched tomorrow.

Good luck with your trading!

Whether it’s because of August holidays or the market focused on the NFP number today, it’s hard to say. I found trading to be slow this week but the currencies moved after a positive NFP number that beat expectations.

The market is now looking toward September for Chair Powell to talk about the Fed tapering bond purchases and any hint of interest rates increasing.

Today after the NFP release a short was taken in the GBPUSD risking 15 pips for a potential 42 pips to our daily target at 1.3859. The moves were uniform with the DXY moving strongly higher along with the U.S. 10 year yield.

Price moved lower through yesterday’s low but found a bottom just ahead of our target and we closed the trade.

Let’s hope next week is more active.

Good luck with your trading and enjoy the weekend!