The John Elfed Forex Blog

RBNZ disappoints NZD bulls.

A 'dovish hold' from the RBNZ has weakened the NZD as earlier rate cuts are being priced in. And created a very nice 'in the moment' NZD short trade. The question now is whether NZD short is still a viable trade. And at the moment, my

The week ahead.

With US data still taking center stage, the weeks main event will likely be Thursday's CPI data, where further disinflation confirmation will be hoped for. Which would give a continuation of the 'soft landing' narrative. Chair Powell speaks again this week, although, I would be surprised

Weekly review.

The week starting Monday 1 July started with a little uncertainty in the air, which had carried over from the previous week. But as we know 'the market' will take any chance it can to price in rate cuts and a soft landing. And thankfully, chair Powell gave

Trade photo

It's an AUD CAD 'interest rate differential trade' based on today's soft data from Canada. The risk to the trade is the usual Friday trading malaise. A rise in the price of oil. Or if the market decides today's NFP report is

Live trade.

Today's NFP report is mixed, with a higher headline number but also a higher unemployment rate. All things considered, I think it should be construed as a 'soft landing' number. Although initial concerns of too fast a slowdown caused volitility upon the release. Simultaneously, Canadian jobs

Thursday 4 July.

The 'post Powell speech' positivity has continued, helped by Wednesday's generally 'soft landing' US data. The S&P 500 continues to make all time highs and for me, 'risk on' trades are still very viable. But considering today is 'independence

Trade photo

It's an interest rate differential trade combined with a positive risk environment. 'soft data' from Japan keeps the JPY as a possible short, but I've chosen the CHF simply to due to guarding against BOJ intervention possibility. I'm going out for the

Live trade.

Powell's 'fairly dovish' speech yesterday has eased any 'hard landing' concerns the market had. And I now feel confident the 'risk sentiment' is positive enough to place a trade. Solid data from Australia keeps the AUD at the top of my '

Market still in limbo.

Uncertainty is still the theme at the moment. As 'the market' appears unsure which way to take the recent mixed data. The VIX remains below 13, so there isn't a particular fear, but at the same time there isn't enough positivity for a '

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The process for success.

FOREX trading is difficult. But it's very possible to make consistent profits year after year. I've managed to do so by breaking the process down into a mental 4 step process. I don't use indicators, just support and resistance. And each trade is based

US ISM manufacturing data.

It's a very fine tightrope between the perfect amount of softening data (soft landing) or data softening too much (hard landing). It currently appears the market doesn't like today's ISM manufacturing data. With the 'risk off' currencies starting to strengthen and the

Weekly review.

It was difficult to form a conviction in the direction of the currencies during the week starting Monday 24 June. The previous Friday's higher ISM data had shown inflation in the service sector was still high (higher inflation= delayed rate cuts= chance of a hard landing). And this

PCE anticipation orders.

Given that it's Friday and quarter end, I'm unsure if I will have confidence in follow through momentum post PCE release, but I do expect the event to create volitility. A few minutes before the release of the PCE data, I will place two BUY STOP

Friday 28 June.

Thursday's docket of mixed data releases, was for me, mildly USD supportive. But has left the market 'as you were', unsure whether to focus on a 'soft landing' or be concerned about interest rates being held higher for longer and causing too big a

Friday's PCE report gains significance.

Attention turns to the 'unthinkable possibility' of global inflation re-accelerating thanks to higher inflation prints from Canada and Australia this week. Currently, the possibility is contained, but if US PCE is reported higher on Friday. We could see concern grip the market. USD JPY has breezed past 160,

Live trade.

'Hot' AUD CPI

CPI in Australia was forecast higher. And it came in even higher than expected. Which created a very nice 'in the moment catalyst trade during the Asian session. Unfortunately, I was fast asleep when it happened and although it's tempting to jump on the momentum right now,

Tuesday 25 June.

Higher than expected CPI from Canada dashes my hopes of a CAD short trade as the chance of back to back BOC rate cuts dwindles. Although I'm not ready to long the CAD based on the news, it would take a few more pieces of positive data. I&

Awaiting fresh impetus.

The week starts fairly quietly, the USD hasn't kicked on from Friday's service ISM data. The falling price of bitcoin is gaining attention but I don't think that's anything to consider at the moment, but it's worth keeping an eye

Weekly review.

All in all, the Week starting Monday 17 June was a week suggesting a soft landing is on the cards. US data came in slightly soft (until Friday's Service ISM data). Early in the week, the RBA head rates but continued to sound hawkish, which keeps the AUD

Psychology lesson.

On Thursday 20 June, I considered placing a pre event short CHF trade in anticipation of a SNB rate cut. But my sister phoned me to ask if I could possibly take her children to school, which of course I was happy to do, but it meant I wasn'

Relentless US service PMI.

US service PMI is reported at over a two year high. US yields are up, the VIX is up and stocks are down as a September rate cut is put in jeopardy. I currently maintain my preference of trading 'hawkish' central banks Vs 'dovish' central banks.

Live trade.

Wednesday 19 june.

It's very unusually a midweek US holiday today. Often the currencies slowly grind in the prevailing direction in quiet market. There is nothing wrong with placing a trade during holiday hours, but it's a case of being aware if the brokers spreads widen. Personally, I will

Live trade.