It was nice to see that throughout the week starting Monday 4 August, in the main, the currencies behaved as you would expect in a 'risk on' environment.
The underlying positive tone was this week helped by the narrative that a softening US Labour market is likely to speed up FED rate cuts. Meaning the 'soft landing' narrative' is very much in tact. Positive APPLE news helped the S&P and, ultimately, it appears 'tariffs' are not going to be as hard hitting as once feared.
Of course, at any moment, softening US data could start to concern the market. Or another tariff spanner could be thrown into the works, but until then, I'll continue to hold a view that 'risk on' trades are viable. Either trading momentum or pullbacks creating 'nice support'.
Currently, I see the JPY, CHF and USD as 'short options'. Hard hitting tariffs on SWITZERLAND bringing the CHF back into play. Any talk of BOJ hikes is currently out powered by the general risk on tone (and possibly 'the carry trade'). Arguably, 'USD short' is the most difficult to have confidence in. As, despite suggestions of swifter rate cuts, the narrative of 'tariffs causing inflation' kept the US 10 YEAR YIELD above 'long term technical support' around 4.2. and the 'tariff inflation narrative' will be something to keep an eye on, particularly as US CPI is reported during the upcoming week.
At the other end of the spectrum, recent GBP woes were put to one side thanks to a 'hawkish cut', positive RETAIL SALES boosted the EUR plus the AUD and KIWI beniffited from the overall 'risk on mood'.
Soft data from CANADA and the CAD'S relative proximity to the US ensures I'm inclined the leave the CAD alone for the time being .
On a personal note, it was a week of two trades. One stopped out and one hit profit. Early in the week following a USD pullback (USD strength) I placed a AUD USD long, based on the theory of more USD 'post NFP selling'. But the trade stopped out.
I then missed any further opportunities throughout the week. Eventually placing a GBP JPY long on Friday. Based on JPY weakness and the post BOE GBP strength.
I realise two trades per week with a 50% win rate is slow progress. It's times like these when (experienced traders) might consider upping the risk percent per trade by 0.5%.
The underlying positive tone was this week helped by the narrative that a softening US Labour market is likely to speed up FED rate cuts. Meaning the 'soft landing' narrative' is very much in tact. Positive APPLE news helped the S&P and, ultimately, it appears 'tariffs' are not going to be as hard hitting as once feared.
Of course, at any moment, softening US data could start to concern the market. Or another tariff spanner could be thrown into the works, but until then, I'll continue to hold a view that 'risk on' trades are viable. Either trading momentum or pullbacks creating 'nice support'.
Currently, I see the JPY, CHF and USD as 'short options'. Hard hitting tariffs on SWITZERLAND bringing the CHF back into play. Any talk of BOJ hikes is currently out powered by the general risk on tone (and possibly 'the carry trade'). Arguably, 'USD short' is the most difficult to have confidence in. As, despite suggestions of swifter rate cuts, the narrative of 'tariffs causing inflation' kept the US 10 YEAR YIELD above 'long term technical support' around 4.2. and the 'tariff inflation narrative' will be something to keep an eye on, particularly as US CPI is reported during the upcoming week.
At the other end of the spectrum, recent GBP woes were put to one side thanks to a 'hawkish cut', positive RETAIL SALES boosted the EUR plus the AUD and KIWI beniffited from the overall 'risk on mood'.
Soft data from CANADA and the CAD'S relative proximity to the US ensures I'm inclined the leave the CAD alone for the time being .
On a personal note, it was a week of two trades. One stopped out and one hit profit. Early in the week following a USD pullback (USD strength) I placed a AUD USD long, based on the theory of more USD 'post NFP selling'. But the trade stopped out.
I then missed any further opportunities throughout the week. Eventually placing a GBP JPY long on Friday. Based on JPY weakness and the post BOE GBP strength.
I realise two trades per week with a 50% win rate is slow progress. It's times like these when (experienced traders) might consider upping the risk percent per trade by 0.5%.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.