Forex Tips

The USD is benefitting from optimism regarding progress with the U.S. – China trade talks. There is no agreement yet, but with the tariff deadline lifted this week by President Trump, the USD has been strengthening for three days now…and gold has been collapsing.

Earlier in the week, we saw the GBPUSD jump upward on optimism regarding Brexit, but the recent highs have not been sustainable because there still is no agreement and the deadline remains March 29th – at this stage.

As long upper wicks formed in the U.S. session overlap, a short trade was taken risking 15 pips for a potential 88 pips to our daily target at 1.3175. Price did not drop like a rock, but it came down somewhat vertically until a candle formed with a long lower wick…which was a warning to us to tighten our profit stop – as buyers were entering. Price moved only slightly higher and closed our trade as the U.K. session wound down.

The GBPUSD will likely be very active this month as the Brexit deadline approaches and rumours abound as to how the future will unfold. The pair has the potential to run to 1.4000 as it does to 1.2500 or 1.2000 depending on how this divorce concludes. Another option is the less volatile but active EURGBP pair.

It should be an exciting month.

Good luck with your trading and enjoy your weekend!

Most Wednesdays, the U.S. Crude Oil Inventories are released. If there is a surprise shortfall…like today…we are likely to see the price of WTI go up and the Canadian dollar benefit. If there is a surprise surplus, then we likely to see WTI move down and the Canadian dollar move down.

Today it looked to me like the USDCAD had found a bottom and was moving higher. A long was taken risking 12 pips for a potential 70 pips to our daily target at 1.3199. It was an aggressive entry because the inventories release was pending. Price moved higher and paused in its ascent just before the release. Allowing for some minor volatility, the profit stop was moved to halfway down the previous blue candle. The news was released and with a very large shortfall in inventories, the pair reversed… closing our trade as WTI jumped up. It’s never fun giving back pips but trading in front of news seems to do it more often than not.

Good luck with your trading!

Trading has been a little slow since Wednesday last week for me and the market is giving some mixed signals. I find it better to be patient and disciplined than to force trades and regret the outcome.

The 1.3150 – 1.3250 area is an important range for the USDCAD at the moment. Today the idea was to take advantage of the weaker USD and slightly higher WTI price.

A short was taken risking 21 pips for a potential 62 pips to our daily target at 1.3154. We had to be patient with the trade, but it eventually began to move downward through its Asian session low, and we closed it at the end of the London session.

The U.S. – China trade talks have made sufficient progress for President Trump to lift the March 1st tariff deadline. He will be meeting for the second time with North Korean President Kim Jong Un in Vietnam to discuss the denuclearization of North Korea. Britain’s Brexit plans remain unresolved, but the GBPUSD is moving higher with optimism…not substance, which means it can drop like a rock if the pessimism resurfaces and a “no deal Brexit” seems imminent.

Lots of mixed signals as the market digests the bigger picture. Be very careful selecting your trade setups.

Good luck with your trading!

On Wednesday before the FOMC Meeting minutes, a trade was found in the USDCAD as it made a series of 3 lower highs – moving down to its Asian session low. Entering short we risked 14 pips for a potential 38 pips to our daily target at 1.3145 with 2 hours left before the London close.

Price moved down helped by WTI moving higher at the time and got very near our target price, but began to bounce before the London close – taking us out of the trade.

The reaction to the Fed. minutes was somewhat subdued and the USD closed positively for the day.

On Thursday, there were no trades for me as the market adjusted further to Fed’s outlook. Traders are now pricing in a 90% probability that the Fed will not increase rates in 2019. There is a 7% probability of a rate cut and now only a 3 percent probability of a rate hike.

On Friday ECB President Draghi will be speaking and traders will be listening carefully. Anticipate euro volatility as the market reacts to his comments – particularly if he is more dovish than the market anticipates.

I remain USD bullish, but not as bullish as last year at this time.

Good luck with your trading!

Overall the USD weakness was evident today but the reason for the selling was not obvious to me. Gold was very strong and equity markets were able to move higher with the exception of London. The GBPUSD moved sharply higher and did almost twice its range.

Having shorted the AUDUSD yesterday, today it was a long position risking 12 pips for a potential 41 pips to our daily target at .7156.

Price moved higher and began to roll over just as the London session was ending where our trade was closed.

Yesterday the USD didn’t have a lot of strength, but we found a short setup on the AUDUSD that we liked risking 6 pips for a potential 51 pips to our daily target at .7104. Volumes were much lighter with North America away on a holiday. Price moved down and our profit stop was hit well short of our target.

I’m not convinced the broad based USD selling today will continue, but I may be wrong. The U.S. – China trade talks resumed in Washington today. Events risks this week include the FOMC minutes on Wednesday and ECB President Draghi speaking on Friday. Canadian and Australian Governors Poloz and Lowe will be speaking on Thursday.

Good luck with your trading!

Early in the U.S. session the EURUSD surged higher then made a series of lower highs as it set up for a short trade. An entry was taken risking 15 pips for a potential 47 pips to our daily target at 1.1248.

Price looked like it could easily fall to its Asian session low which coincided with our daily target. Price had to make it through one level – a multi-pivot at 1.1268 (not shown) and then on down to our target. The USD strength was returning but price bounced twice unable to close beneath the level. We had a tight profit stop protecting 15 pips and it was hit.

Sometimes a trade looks really good but it doesn’t work out – that’s trading.

The market was a little erratic today as the U.S. – China trade talk headlines were somewhat negative, as they were last Friday.

We will know more tomorrow but any negativity may spook the markets going into the weekend. Be careful!

Good luck with your trading!