When the markets are anxious “risk off sentiment” money flows tend to move toward the yen, Swiss franc and gold. Equity markets can be seen as an indicator of fear and greed. The U.S. equity markets sold off on Wednesday erasing gains for 2018. On Thursday the markets rebounded and closing higher and recovering Wednesday’s losses. On Friday, the equity markets moved down again sharply as the U.S. session got underway.   As price made a lower high early in the U.S. session, a short was taken in the USDJPY risking 13 pips for a potential 32 pips to our daily target at 111.75. Price moved down to our target and we closed the trade. Price gained further downside momentum and continued lower without us. As the U.S. equity markets began to pare some of their losses intraday, the pair reversed higher. The majors made uniformed moves today and the USD has been weaker once again. I’m curious as to whether the U.S. equity markets can recover to close positively today to end the week. If not, next week may start off ugly with negative sentiment and continued selling. Good luck with your trading and enjoy your weekend!

It’s been a very slow week with most major pairs trading in subdued ranges.   After the Bank of Canada rate statement today, a long was taken in the USDCAD risking 14 pips for a potential 50 pips to our daily target at 1.2120. Price moved higher as the DXY moved off its lows. Price continued upward and we quickly locked in profit moving our stop higher. Price climbed then paused at its Asian session low… unable to sustain above the 1.2100 figure. We tightened our profit stop as we were approaching the end of the U.K session and price came back to close our trade. Thursday will have numerous important economic news releases, so keep an eye on the economic calendar. U.S. Core CPI and Jobless Claims will be closely watched along with the ECB. Good luck with your trading!

Oil continued higher today and after the U.S. session got underway, the DXY backed off its highs as the equity markets moved higher. A short was taken in the USDCAD risking 25 pips for a potential 55 pips to our daily target at 1.2516. An earlier long trade in the CADJPY was also taken (not shown) as the Canadian dollar was the strongest currency and the Japanese yen was the weakest currency of the majors. The USDCAD moved progressively lower but not with the momentum I had expected – given the strength of the CAD today. This pair tends to become quite sticky around figures and mid-figures – often reversing. As the pair penetrated the 1.2550 level and immediately came back, the trade was closed for modest pips. If oil continues higher, watch the 1.2500 figure, 1.2450 and especially the 1.2420 levels to the downside. Good luck with your trading!

A fairly light news day for economic releases to begin the week and the USD remained strong.   There was an initial move lower after the U.K. session got underway, followed by a pullback going into the U.S. session overlap. As the EURUSD began to move lower again, a short was taken risking 20 pips for a potential 77 pips to our daily target at 1.0680. Price moved lower to the 107.25 area before some profit taking going into the European close. The final two candles of the U.K. session had the pair trying to extend beneath the 1.0725 level and we closed our trade as the U.K. session ended. This was a fairly easy trade to enter as the hourly and daily charts already had confirmed downside momentum. Good luck with your trading!

A number of years ago, a friend who manages a large hedge fund, told me that he liked to gauge risk sentiment with the AUDJPY pair. Like many traders, my preference has been the bond market… particularly the US 10Y yield. This gentleman who knew more about JPY trading than anyone I have ever met… before or since equated the AUD strength to risk and JPY strength to safety. Today before we hear from Fed Chair Powell, I anticipated the currency markets to be like the calm before the storm. In other words, trading in a very tight range. What struck me as unusual was the AUD strength going into the U.S. session. Traders have every reason to be nervous going into the Fed’s potentially extremely volatile decision announcement. When the AUDJPY failed to move higher and broke 81.35 – a level of interest on the daily chart, a short was taken risking 8 pips. The first level to get through was 81.14 followed by the 81.00 figure and 80.93. The idea was not to be greedy around the figure and any failure to break below 80.93 would likely result in a retest of the 81.00 level. Further confirmation of the trade’s strength was evident in the CADJPY moving the same direction and the AUDUSD pushing lower in tandem. On Thursday, the Bank of England, European Central Bank and the Swiss National Bank will announce their interest rate decisions. Good luck with your trading!