USD-CAD Sold Off

USD/CAD is continuing its descent through 30-year lows in the wake of the bluntly hawkish statement from the Bank of Canada. It is currently around C$1.0740 after notching a low at C$1.0737, its lowest level since Sept 1977, according to EBS.

Canadian bonds have tumbled in the aftermath of the Bank of Canada's policy statement, which clearly signaled that possibility of interest rate increases in that it referred to as the "near term." The benchmark 10-year bond is yielding 4.48%, from 4.41% Fri, with the two-year yielding 4.56% from 4.45%. [via Dow Jones Newswire]

USD/CAD 5 min chart

European Session 29-05-07

"The trend is in the euro's favor. The main driver is the rate sentiment in the euro zone, where the market is pricing in more tightening."

I hit my next account target (i.e. level 5) before the open of European session. As soon as I woke up this morning, I saw a golden opportunity and hence quickly exited my last week's open short EUR/JPY position at 163.25 for a gain of 34 pips. It was a ghastly experience holding on to this short position over the long weekend holidays. The position was in red most of the time and yesterday was actually quite painful watching over the meaningless price movement due to the market inactivity.

No trade made in this session. But look at this EUR/JPY. One-way traffic. What a reversal! I was fortunate as I did not hesitate to book my profit earlier.

EUR/JPY 5-min chart

Major Economic Events Ahead

28/5
UK/US Public Holidays

29/5
2:00pm CAD Interest Rate Statement
3:00pm USD Consumer Confidence

30/5
2:30am AUD Retail Sales
1:15pm USD ADP Nonfarm Employment Change
7:00pm USD FOMC Meeting Minutes

31/5
1:30pm USD GDP
1:30pm CAD GDP
2:45pm USD Chicago PMI

1/6
1:30pm USD Nonfarm Employment Change
1:30pm USD Core PCE Price
3:00pm USD ISM Manufacturing

Trade The News 24-05-07

European Session

Exit EUR/USD at 1.3440 for breakeven
Exit EUR/JPY at 163.20 for +7 pips

US Session

After Durable Goods Report

Exit USD/CHF at 1.2271 for -20 pips (Stopped out!)

Frustrated! Many times I found myself in trouble by jumping into a trade without good technical confirmation. Impulsive trading error.

After US Home Sales Report:

Exit GBP/USD at 1.9855 for +28 pips


Also exit USD/JPY at 1.2160 for +19 pips

Session rating:(value:+1); Accumulated so far: 4 stars

Trading Update

Kind of slow in the last few sessions. Finally, I gained some pips in this morning European session.

Short USD/CHF at 1.2290 Exit at 1.2262 +28 pips

In the mean time, I am one step closer to the target.

Accumulated so far: 3 stars.

European Session 21-05-07

Sneaky! I managed to exit my short USD/CHF at 1.2280 for -7 pips loss. However, I just could not able to reverse my dollar-bearish view yet to re-enter long on USD/CHF and subsequently sell EUR/USD at 1.3486 (even though I received confirmation from the technical chart). What I did was selling EUR/JPY at 163.60 instead, netting only +14 pips, but missing the action of a bigger move.

EUR/USD 5-min chart


Did this move (Euro 60-pips drop) catch anyone by surprise?

Session rating: - ; Level: unchanged at 2 star

Japanese Candlesticks

I have compiled some of my favourite candlestick combinations for you guys to check on. Just to make it clear that most of the charts you see in this site are simply 5 minutes intraday candlesticks covering two fixed trading periods. For European session, 8.30am - 11.30am UK time and for US session, 1.30pm - 4.30pm UK time. I am currently collecting them (charts) for my own research/reference purposes.

Bullish signals:-


Bearish Signals:

US Session 18-05-07

A tricky session. I smelled the rat but couldn't avoid falling into the trap after the release of US consumer confidence report. Two losing positions in a row, wiping my earlier gain on the CAD trade +29 pips.

Long USD/CHF -12 pips (a speculate trade that went wrong)


Short AUS/USD -11 pips (jumped in the trade too soon without further confirmation)


Session rating: - ; Level: 2 star

Trade The News (CAD Retail Sales)

Canada Dollar Touches Highest Level Since 1977 on Interest Rate

Another good setup before the news event. Short USD/CAD +29 pips.

EUR/JPY Watch

Yen Gains Most in Month as China Allows Faster Currency Gains

A simple technical trade. Unfortunately, I missed this one. Expect the unexpected when the market has decided to move.

European Session 18-05-07

EUR/USD (-11 pips) - I should have waited for further confirmation on this trade.


And thanks to this GBP trade +43 pips, I accumulated a star and moved to the next trading level.
Session rating:(value:+1); Accumulated so far: 2 stars

Trade The News (UK Retail Sales)

Sterling tumbles on surprisingly weak UK retail sales


Short GBP/USD (+43 pips)

US Session 17-05-07

Not much happening for me in this session. Dollar surged immediately after the jobless claim report and since then the market has stayed range-bound.

All I did was counter-trend trading. Two positions, one good, one bad.

Long GBP/USD -11 pips


Long AUS/USD +10 pips


I missed a higher probability setup to enter short in USD/CAD.


Session rating: - ; Level: 1 star

European Session 17-05-07

Trade Summary

Short USD/JPY 1.2086 Exit 1.2097 (-11 pips)
Long GBP/USD 1.9770 Exit 1.9785 (+15 pips)

Session rating: - ; Level: 1 star

US Session 16-05-07

I was trialing a new system and didn't notice that I was going against a strong trend. Consequently, my long AUS/USD trade made a massive 25-pip loss. I need to be extra careful next time round and not to let this happens again.

Long AUS/USD (-25 pips!!!)


Short GBP/USD (+16 pips) - Didn't quite get the best exit price, but I need to book this quickly as I was caught wrong-footed twice in today's action.

Session rating: (value:-0.5); Accumulated so far: +1 star

European Session 16-05-07

BoE Inflation Report and US Housing Data in Focus

*1st trade of the session
Short EUR/JPY at 163.67 Exit at 163.78 Results -11 pips
(Hanging on too long, should have exited for a smaller pip loss)

*2nd trade of the session
Long USD/CHF at 1.2152 Exit at 1.2156 Results +4 pips
(Decided to book profit immediately following a losing trade, plus a few pips more if acted sooner)

Looking forward to next session.

Session rating: (value:-0.5); Accumulated so far: +1.5 stars

US Session 15-05-07 (CPI Report)

FOREX-Dollar drops vs euro after US CPI, flows data
Dollar Falls Versus Euro on Less-Than-Forecast Inflation Rate

Price action went choppy after the release of US CPI report. As a result, my short USD/JPY made a 11-pip loss. Then, I changed my direction, my winning short GBP/USD swung from +15 pips into breakeven. On hindsight, I should have booked any profit quickly after facing with a losing position.

I regrouped in the second-half of the trading session. I shorted both USD/CHF and USD/JPY at 1.2190 and 1.2045. They were losing positions at first with over 10 pips loss each. Then, the big move came, what a relief....

Short USD/JPY (-11 pips)
Reshort USD/JPY (exit half for +24 pips, still holding half)












Short GBP/USD (from +15 to breakeven, wrong timing again, same result as in this morning session)












USD/CHF (Only exit for +26 pips) - I got over-excited and left many pips on the table. Ouch!











Session rating:(value:+1); Accumulated so far: 2 stars

European Session 15-05-07

Headlines: Pound Falls as Report Shows Inflation Slows From Decade High

I picked up two trades immediately in the early hour of this session (i.e. long GBP/USD at 1.9803 and long EUR.JPY at 162.79) and unfortunately had to give back an unbooked 10-pip profit on the GBP position. My intention was to hold thru the CPI news event, hoping to cash in more on fast price movement if the news was on my side. However, this wasn't the case as I was already stopped out before the news event. No matter what, I liked the high reward/risk ratio of this position.

For the other position EUR/JPY, my patience has paid off. I entered based on the the support found in using MM levels at M2 Pivot and eventually stopped out for +30 pips near to M6 Pivot.

Long GBP/USD (Stopped out for breakeven)











EUR/JPY (trailed stop until +30 pips)











Session rating:(value:+1); Accumulated so far: 1 star

US Session 14-05-07

It wasn't a good day for trading. The markets stayed within a tight range (~15 pips) for the whole session. Towards the close of London market, EUR/USD managed to stay above the 200 EMA. My long USD/CHF position swiftly turned into a 3 pip loss.

Long USD/CHF (-3 pips)






EUR/USD

European Session 14-05-07

Basically a warming-up session for me since I have not watched them (charts) for a week. Hence no trades this morning. However, some potential trades spotted as follows:

Short USD/CAD












Long EUR/USD

One Night in Paris

US Session 04-05-07 (Non-Farm Payroll)

Headlines
Dollar steady after below-forecast US payrolls

The non-farm payroll came out lower than expected. Bearish news for the dollar. I waited for about 10 minutes before I entered my positions, simply to avoid any wild price swings that could possibly stop you out. Remember, do not simply rush into positions. I find the following very true when you are trading a news event, You will always be given enough time to response, hence make sure you understand the news properly in order to make the right decision and, most importantly, enter at the best price during that time.

Long GBP/USD - Set to breakeven once in front with 15+ pips. Initially, I wanted to hold the position over to next week but finally made an exit for +40.











Short USD/JPY - I am still holding this one. Actually, I was expecting a bigger reaction from the NFP report earlier. A breakeven trade at least.











Hope you traded well this week. I will be away all week next week.

US Session 03-05-07

Headlines:
Dollar rises on stronger-than-forecast US data

Finally some price actions. All mojors broke the support/resistance of 200 EMA and continued to stay in trending manner almost for the whole session. Most importanly, price correlation could be found among them.

GBP/USD











EUR/USD











USD/JPY











USD/CHF (+18 pips)











EUR/JPY (+11 pips)

European Session 03-05-07

Nothing much happening here. The market is pretty flat this morning.

Short USD/JPY at 1.2009 (+2 pips)











Short USD/CHF at 1.2106 (+0 pips)

US Session 02-05-07

A very very tricky session. I am still trying to make sense of today's price action. You will find yourself in a better position if you could remain focused on the technical side, rather than trading impulsively based on the outcome of economic news releases. My trading decision has been biased by the fundamental news, hence I made some poor judgement in this session.

GBP/USD (no position) - I know it doesn't make any sense, but looking on the technical side, it is possible to make some good pips to go short GBP/USD (buy the dollar) after the soft ADP employment report.











EUR/USD (no position) - Simply and strongly supported by firm EUR/JPY prices.











USD/CHF (-12 pips) - Basically, it had no price correlation with other currency pairs before the 3pm news. I should have avoided this pair but I went long impulsively at 3pm at 1.2146 to catch the good news report. I paid a price and a lesson learnt.











USD/JPY (-8 pips) - For no strong reason, I entered the same long position at 3pm but eventually cut losses at 1.2010.

European Session 02-05-07

A frustrating session - I hesitated too long and missed some good moves.

AUS/USD +8 pips (the move was slow to develop)

EUR/JPY - a missed opp to go long











GBP/USD - Should have pulled the short trigger without much hesitation. Confirmation was there in USD/CHF pair. It was a simple +30 pips move.