The Dollar is giving back some ground against the Euro and the British Pound after several weeks of gains. The trend reversal comes as global Central Banks adopt a more dovish tilt, while Brexit uncertainty clouds the U.K., and as President Trump steps into the currency debate.
To say that last week was a busy session for forex would certainly be an understatement. The "will they, won't they" saga of Brexit continues to go nowhere—and consequently, the Pound Sterling has been getting absolutely hammered since the beginning of May. Oh, and did we mention that British Prime Minister Theresa May announced her impending resignation on Friday?
Currency markets are extremely volatile right now, which means there are some great entry points for traders who know how to manage their risk. With this in mind, we'd like to give a quick shout out to three of our Funded Traders who stayed smart and made some great trades last week off the Brexit madness.
Four days into his Funded Account®, Nick S. in Texas found himself 51% to his total Account Loss Limit. That's right, his $5,000 balance fell to a closing low of $3,307 — putting him just $1,600 from losing his account. But instead of spiraling deeper and deeper and taking larger risks, Nick says that he was hit with the realization: "This is real money."
Indeed it was, and Nick finally got back to the strategy that helped him pass the Trading Combine® and earn live trading capital in the first place. That led him on a path to $6,700 in withdrawals over the next two months.
Here's how Nick did it.
The dollar rally faces a test as the first week of April brings a flood of economic data. Take a look at some (certainly not all) of the key statistics due out Monday through Friday:
- Monday: Retail Sales, Manufacturing
- Tuesday: Durable Goods
- Wednesday: ADP jobs
- Thursday: Jobless Claims
- Friday: JOBS, JOBS, JOBS
With the U.S. Dollar posting its best monthly gain of 2019 in March, surprises or disappointments in the data will help traders determine whether the rally has legs.
Did you see that move in EUR/USD yesterday?
Since hitting a low in early March, EUR/USD has been on a tear, gaining eight out of 11 trading days. Heading into yesterday's Federal Reserve meeting, that put the price pushing up towards some critical resistance.
To make things more interesting, the FOMC went ultra-dovish in their statement, backing away from any interest rate increases in 2019, downgrading the outlook for growth and setting an end date for its quantitative tightening. That hit the U.S. Dollar hard and has EUR/USD threatening to reverse a year-long downtrend. Let's take a closer look.
On Monday, the British Pound shot 1% higher. Those gains were magnified in the Asian and London trading sessions before the pair sold off sharply. Coming into the office Tuesday, futures and forex traders in the U.S. will see that move nearly fully reversed, with the GBP/USD trading at 1.3060, down from a high near 1.33 in overnight trading.
Tuesday's move came as U.K. Attorney General Geoffrey Cox offered a legal opinion that may make Prime Minister Theresa May's plan less likely to pass today when it comes up for a vote. Ahead of that key vote, here is what to look for as you trade the British Pound.
We have a HUGE WEEK for markets ahead. Take a look at the economic events that are poised to move forex markets in the next five days:
- Monday, 10:30 PM ET: Reserve Bank of Australia
- Wednesday, 10:00 AM ET: Bank of Canada
- Thursday, 7:45 AM ET: European Central Bank
- Friday, 8:30 AM ET: U.S. February Non-Farm Payroll Report
Here’s a look at how all these events may shake out in the market.
Twice this week, I’ve been noticeably “scared” to enter a trade.
The first time was Monday, when I noticed an opportunity while watching the Market Forecast with TopstepTrader’s Senior Performance Coach John Hoagland. As he does every day at 8:15 AM CT live on TopstepTrader's Facebook page, John brought up the Crude Oil chart. It showed Crude was selling off hard to $51.26, slightly below a double swing low at $51.33 from January 17 and January 28. It was a clear opportunity.
But I missed it.
As the chart above shows, the price even came back to test that level two hours later. You’d think that this would be a great opportunity, but instead it just confirmed my thoughts that the market was “heavy.” The market looked heavy. It looked like the support was going to give.
It didn’t, and with the benefit of hindsight, we see that prices rallied that day $1.50 and have been rallying ever since. Opportunity missed again.
Are you looking for the best, most concise trading advice that you can find. Then look no further — we have you covered on this Best of Limit Up! episode. Over the year since the Limit Up! podcast launched, Topstep has talked with millionaire (and billionaire) traders and 'Market Wizards,' distilling their experience into actions and routines that you can implement in your trading.
In this episode, Topstep’s Eddie Horn walks listeners through prior conversations with five trading legends — Jack Schwager, Brett Steenbarger, Linda Raschke, Tony Saliba and Larry Benedict. Combined, these guests have taken untold fortunes from futures, options and forex markets. And now they'll share with you those key factors that helped them do it.
In 2018, TopstepTrader funded more than 1,020 futures trading accounts with our capital. Behind all of those accounts was one risk manager: Mick Ieronimo. Mick saw the behaviors and trades that powered successful traders, as well as those behaviors that were common among unsuccessful traders.
In this must listen-to episode of Limit Up!, Mick discusses all of these things and what he has learned as a trader, both independently and with 'Market Wizard' Linda Raschke, and risk manager with TopstepTrader.