Forex Tips

The week started off with a weaker USD and a “risk off sentiment”.  The USDJPY moved higher throughout the first half of the U.K. session. As the U.S. trading got underway the pair began to reverse and we entered short risking 12 pips for a potential 64 pips to our daily target at 105.54.

Price initially went sideways testing and retesting its Asian high on a day with a very light economic news agenda.  Price moved lower as the European close approached.  We closed the trade with London still having an hour of trading left due to the time difference here in North America since Daylight Savings went into effect last week.  Fortunately, we will be back to our regular closing time when the U.K. and Europe move their clocks ahead this coming weekend.

On Wednesday the market expects the first rate hike  from Jerome Powell and also for inflation forecasts to remain unchanged.  Any wording to the contrary could create major volatility.  As stock markets and the USD are off to begin the week, keep an eye out for JPY strength if this continues.

Good luck with your trading!

 

Looking at the daily chart of the GBPUSD, we can see how the pair continues to make a series of lower highs.  It may not be long before price comes down to test last September’s high before moving lower.  There is plenty of downside for the GBP, but on any given day a headline regarding Brexit could potentially move it up in the short term.  Currently my preference is to look for short setups.

As price made a lower high as the U.S. session got underway, a short was taken today risking 18 pips for a potential 63 pips to our daily target at 1.3893.  Price moved down, retested its Asian high…as it tends to do… then descended to our target where we exited the trade.

Trading has been very good this week but I took Wednesday and Thursday off.  With all the turmoil regarding free trade and tariffs, the markets are very active.  As President Trump hires and fires within the White House, we also see the markets reacting.  As I mentioned earlier this week, there is a lot of fundamental reasons to be bullish the USD, but the markets don’t always comply with fundamental analysis.  Continue to trade what you see  and keep your stops tight.

The Trump administration whether you agree with it or not, certainly keeps things very interesting and somewhat entertaining.

The Daylight Savings Time shift for North America has another week to go before Europe and the U.K. adjust their clocks forward.  I won’t be adjusting my charts in the meantime.

Good luck with your trading and enjoy your weekend!

With scandals and politics in both the U.S. and Japan today, the USD came under pressure and we took advantage of a short setup late session.  After a very strong day for the USDJPY during the Asian and first half of the U.K. session, it began to unravel as the U.S. session got underway.  After a brief move up, the pair reversed downward and we risked 12 pips for a potential 72 pips to our downside target (106.25).  With a lower high in place, we went short and rode price lower…closing the trade at the London close.

The idea was to go short using a small stop loss due to the limited time left in the session and also to get the risk out of the trade as soon as possible…locking in profit as the trade progressed downward.

 

On a fundamental basis, the USD looks poised to strengthen with interest rate hikes beginning next week and a potentially more conciliatory North Korea.   Also, with some of the changes in the White House, will oil begin to move up?

We have a very active markets at the moment.  I’m beginning to hear more and more traders talking about how profitable February and March have been for them.

On Wednesday, ECB President Draghi will be speaking followed by a number of U.S. economic news releases.

Good luck with your trading!

 

I’m behind on my postings due to some site update issues which sent my emails from Friday afternoon until Tuesday morning into lost cyber space.  If you tried to reach me over this period, please email me again as the issue has been corrected.

The markets have been very volatile as “trade war” talk and tweets have created uncertainty for the capital markets.  Who will be affected by steel and aluminum tariffs imposed by the U.S is still not clear… nor are the retaliatory measures that affected countries might impose against the U.S.  We do know that Mr. Cohn has parted company with the president over the issue and the markets reacted swiftly.

On Wednesday as the EURUSD failed to close above its Asian high, a short setup was found with a very attractive return if price had made it down to our daily target.  When price bounced back above its Asian low, our profit stop was triggered and the trade yielded a modest gain.

Today, we chose to trade the GBPUSD early in the U.S. session and avoid the potential volatility while ECB President Mario Draghi was speaking.  The USD was strong today after a volatile week and we risked 23 pips for a potential 47 pips to our daily target at 1.3824.  Price moved down quickly and we closed the trade as our target.

The markets remain in a heightened sensitivity mode so it is prudent to keep your stop losses tight and cherry pick your entry setups…while protecting your profits.

I will back next week and pass on trading tomorrow with the NFP numbers due.

Good luck with your trading!

 

Avoiding potential volatility today during Fed Chairman Powell’s  testimony, we chose to concentrate on the EURGBP as confusion regarding Britain’s Brexit weighed on the GBP.

An entry long was taken risking 15 pips for a potential 44 pips to our daily target.  Price was reversing upward and sustained its momentum moving through its Asian low and through its Asian high.  As price tested and retested an important level from the daily chart, we exited just in advance of the U.K. close.

 

The USD lost its upward momentum today unrelated to Chair Powell’s comments.  It was President Trump’s tariff talk  which created a lot of uncertainty for the markets resulting in both USD weakness, and the stock indices plunging.

The GBP could be quite volatile tomorrow with Prime Minister May speaking and subsequently Governor Carney.

The Euro too will be interesting as traders will be very interested in the SPD vote in Germany this weekend as well as the Italian election outcome.

Good luck with your trading!