Forex Tips

Trading has been tricky to start the year. I have noticed over the years that the narrative at the beginning of January tends to change dramatically by the end of January. The market came into January with a short USD bias and the volatility thus far suggests many market participants have been stopped out of their short USD positions and are now building long positions.

Brexit and the U.S. election result are now history in the making. The pandemic continues but vaccines are becoming available.

Oil continues to rise after the unprecedented move last year when it traded negative intraday.

Two factors that are bullish for the Canadian dollar are the resilience of the U.S. economy and rising commodity prices… especially oil.

Today as the Euro failed to sustain momentum early in the U.S. session overlap, a short was taken in the EURCAD risking 14 pips for a potential 40 pips to our daily target at 1.5452.

Price moved lower and our target was reached, just in advance of the U.K. close.

Good luck with your trading and stay healthy!

I wish everyone a happy, healthy and prosperous new year!

We begin 2021 with a bearish USD bias as the market flows continue to show USD selling.

With WTI Oil testing $50 to begin the year, a level not seen since pre-pandemic, a short USDCAD position was taken risking 18 pips for a potential 50 pips to our daily target at 1.2708.

As the U.S. session overlap got underway a brief move higher was rejected and subsequently even strong ISM Manufacturing numbers couldn’t give the USD a boost upward.

Price moved lower through its Asian session low, stopping to test its daily low before moving down to our daily target as the U.K. session closed.

With the 1.2700 figure just under our target, we were happy to get out… anticipating some buyers entering, but it was not the case as the pair continued lower after the U.K. close.

This pair has been one of my favourites to trade since WTI Oil moved back above $35. It doesn’t always net many pips but it has been active most days and 10 -20 pips is frequently achieved while protecting profits.

Good luck with your trading in 2021!!!

The currency markets are known to be volatile and during the final days of the ongoing saga of Brexit negotiations, the GBPUSD is extremely volatile. Be careful above 1.3500.

The EURUSD is also suddenly volatile at unusual times of the trading day. If you look at its movement Friday, Monday and today, someone was buying USDs and down it went each day with similar smaller moves in other majors. With the market quite short the USD, this is intriguing.

Having missed a nice setup Monday, on the GBPUSD… not wanting to start the week with a potential 30 pip loss, and missing out on a move that extended beyond 70 pips, I decided to risk 15 pips today for a potential 57 pips to our daily target at 1.3443.

Unusual activity was seen again, just after the European markets closed – up surged the GBP. We saw an instance of this type of move last week as well.

All eyes will be on the Fed tomorrow and a dovish tone could move the EURUSD over 1.22. Many seem to like the pair over 1.20 but I prefer the USDCAD short setups – especially with oil moving higher.

As the holidays approach there will be less liquidity especially near month end. Keep stops tight and be selective as always.

Good luck with your trading!

There is still no sign of a Brexit deal. The E.U. Summit begins tomorrow along with the ECB Monetary Policy Statement and Interest Rate Decision.

After moving up in the Asian session the EURUSD reversed in the European session back down to 1.2100. It briefly retraced going into the U.S. session before running into sellers at 1.2123. A short was taken after the double top and continuation lower – risking 15 pips for a potential 32 pips to our daily target at 1.2077.

The EURUSD continued lower and we closed the trade at our target. Although PM Johnson will be dining in Brussels tonight, contentious issues remain and he has stated that walking away without a deal is “okay” too… if an agreement cannot be made. Expect more twists and turns as negotiations continue in the meantime.

The GBPUSD remains very volatile and if one is inclined to trade it, tight stops and locking in profits quickly is a sound tactical strategy.

Good luck with your trading!