Forex Tips

The GBP pairs have been very active since PM Liz Truss came to power. Last week she fired her Chancellor of the Exchequer. On Friday, the Bank of England’s emergency bond buying program ended. The newly appointed Chancellor of the Exchequer, Jeremy Hunt is trying to prevent further damage to the GBP. The Conservative Party is scrambling to determine what is next for PM Truss, who has severely damaged the strength of the country’s currency and investor confidence.

Needless to say, the GBPUSD has been very volatile of late and today with a very weak USD, to begin the week, the pair made a series of higher lows and a long was taken early in the U.S. session overlap – risking 28 pips for a potential 88 pips to our daily target at 1.1401.

The pair moved higher on this light economic release trading day. The USD continued to weaken through the session and the major pairs, with the exception of the JPY, traded higher against it.

We protected our profits as price continued higher – especially as price moved above our daily target. The first pullback from above our target closed the trade. Keeping stop losses and profit stops tight on countertrend trades is very important as they can end abruptly. This is especially true of the higher octane GBPJPY.

Good luck with your trading!

The GBPUSD moved lower today early in the U.K. session. It pushed beneath its Asian session low, retested the level but failed to close above it. A short was taken after the bearish engulfing candle, risking 30 pips for a potential 164 pips to our daily target at 1.1123. The GBPJPY made the same pattern as the GBPUSD once again. The Initial Jobless Claims release sent the pairs higher for one candle as did the opening of the U.S. equity markets… then the downward trend continued.

A major surge lower occurred in the last 15 minutes of the U.K. session and we exited the trade at the close, just above our target. If it had been the USDCAD, we would have waited a little longer, but not with the GBP.

Friday traders will be very attentive to the NFP release and we will look for either USD strength or weakness immediately following. Be careful in the meantime.

Good luck with your trading!

The volatility in the GBP is not likely to dissipate soon. Both the GBPUSD and GBPJPY moved in tandem downward today with the recovery of the USD.

The GBPUSD was unable to close above yesterday’s high during its Asian session and the U.K. traders began their day pushing price lower. After a very brief pullback testing its Asian session low, the pair failed and a short was taken risking 28 pips for a potential 194 pips to our daily target at 1.1214.

The pair dropped almost 80 pips going into the U.S. session overlap where a number of economic releases were pending. We locked in a nice profit and waited. Price moved lower going into the European close, then began to bounce without hitting our daily target. The trade was closed at our profit stop about half an hour before the U.K. close.

If the pair can take out the 1.1200 figure and the USD continues to be strong, a test of the1.0900 area is quite possible. Conversely a move above 1.1500 with USD weakness could test 1.1750.

Keep an eye on the DXY and GBPJPY for direction.

Good luck with your trading!

I’m combining two days of trading in one post due to time constraints.

The USD which has been very strong against other currencies finally had a couple of back to back days of weakness.

On Wednesday, the EUR found a bottom near .9535 just before the U.K. open, it then made two higher lows and two higher highs before the U.S. session began. As the pair began to move higher an entry was taken risking 27 pips for a potential 92 pips to our daily target at .9678. As this is a countertrend move, we watched price action closely as it reacted to an up-trendline and its Asian session high. Price continued to the upside as the USDX got weaker and weaker. Content to reach either yesterday’s high or our daily target before the U.K close, we exited the trade at .9678.

On Wednesday, the USD was weaker for a second day in a row and we took another long trade in the EURUSD. The pair had moved down in the Asian session, made a false breakout lower as the U.K. session got underway and reversed to test its Asian session high… where it failed and pulled back as the U.S. session got underway. After a bullish engulfing candle and a weakening USDX, a long was taken risking 32 pips for a potential 74 pips to our daily target at .9787. A technical level today at .9779 was also a level of concern if price couldn’t get through it. Fortunately price moved to our target just after the European close and our trade was exited.

Friday will be the last trading day of the month and quarter, so there may be extra volatility. With talk of central bank interventions, Japan last week and the U.K. this week, be careful with your stop losses. If the USD continues to weaken, the EURUSD could end up retesting par once again. Currently the pair although technically in a downtrend, could retrace up to .9900 with a softer USD.

Good luck with your trading!

The GBPUSD made a series of three lower highs today, one in each session, then it plunged to new lows… not seen in decades. After rejecting the 1.1100 level a short was taken as the U.S equity markets opened against a backdrop of a very strong USD.

Price made a faint bounce at the 1.0900 level as the European trading ended for the week and our profit stop was triggered.

As mentioned yesterday, there is a lot less uncertainty in the markets and the U.S. Federal Reserve has been very transparent in their interest rate strategy.

Good luck with your trading and enjoy your weekend!

In the month of September the U.S. Federal Reserve, the Bank of Canada, the European Central Bank and the Swiss National bank have all raised the interest rate by 75 bp. The Reserve Bank of Australia and Bank of England made 50 bp raises this month and the Reserve Bank of New Zealand made a 50 bp hike in mid August. Interestingly the Bank of Japan intervened in the currency market yesterday for the first time since 1998.

The EURUSD continues to trend lower and as it moved down today during the U.S. session. A short was taken risking 25 pips for a potential 55 pips to our daily target at .9806. In 2002, the EURUSD moved below .9400 and it could again. The USD continues to move higher and economic numbers continue to show the resilience of the U.S. economy – so far.

Our strategy is to continue to look for the lower highs after retracements and trade with the USD strength.

Although we didn’t make it all the way to our daily target we did manage to make it to yesterday’s low where our profit stop was triggered.

There is a lot of uncertainty out of the markets now and trading hopefully will be more rewarding.

Good luck with your trading!