The John Elfed Forex Blog

Wednesday 25 September

Nothing has happened to alter my view of 'risk on soft landing trades'. (Ideally with a stop loss behind 1hr support) Slightly lower than forecast Australian CPI hasn't dented sentiment for the AUD, attempts from china to stimulate it's economy is helping the positive

Trade photo

It's another 40 pip stop loss, 60 pip profit target...'risk on' trade, based on the current soft landing narrative. The AUD is my preferred long due to still hawkish RBA, combined with china's attempt to boost its economy. The JPY is currently the

Live trade

No surprise to see the RBA hold rates, with no sign of an imminent cut. Combined with potential stimulus from china to boost its economy should see the AUD remain supported. At the same time, the BOJ thinks the 'unwinding' of JPY longs could have reached it'

Trade photo

It's a 40 pip stop loss, with 60 pip profit target 'risk on' trade. The risk to the trade is JPY strength, but currently, the USD is recovering Vs the JPY, so in this moment, it makes sense to short the yen. Feel free to email

Live trade.

Given my recent narrative, it's probably no surprise to see I've entered AUD JPY long as a 'risk on' trade. Email photo to follow:

Weekly review

The week starting Monday 16 September had three central bank meetings. And each one added to the 'risk on' narrative in its own way. The USD began the week on the back foot, as the market anticipated at 0.5bp rate cut from the FED. On Wednesday, a

Friday 20 September.

The general mood remains positive, with the market seemingly content the FED is cutting rates into a fairly strong economy. The VIX remains below 17, the S&P has hit all time highs and the 'soft landing narrative' is back en vouge. GBP Sentiment remains positive post

Trade photo.

It's a 40 pip stop loss with 60 pip profit target, 'risk on' trade, based on the markets positive reaction to the FOMC cut. The BOE has held rates in a 'hawkish hold' so the GBP long makes sense to me, although an AUS

Live trade.

Following a 'hawkish hold' from the BOE, I've entered long GBP JPY as a 'risk on' trade. Email photo to follow:

Waiting for the dust to settle.

There had been talk of a 0.5bp rate cut at tonight's meeting. But the fact it actually happened, I must admit was a bit of a surprise to me. In the immediate aftermath of the decision, it looked for all the world a USD short was going

A waiting game.

Today's US retail sales gave the dollar a lift, the data suggests a 0.25bp cut is warranted rather than the 0.5 the market has been pricing in. Does that make the USD longable? Arguably an 'in the moment' USD JPY long was tradable in

Monday 16 September.

'Soft' Chinese data over the weekend didn't 'spook' the market. And the USD has been on the back foot as the market anticipates a 0.5bp rate cut on Wednesday. Possibly setting itself up for a disappointment, but we'll see. (A quick

Weekly review.

I found the risk environment during the week starting Monday 9 September to be mildly positive / neutral. The VIX gradually dropped below 20, the DOW, NASDAQ and the S&P all had positive weeks. The market digested the previous Friday's NFP number and speculation between a 0.

Trade closed.

I have closed yesterday's AUD CAD trade to avoid weekend risk, for a profit of +0.9 The trade actually got within a fraction of a pip away from the +1.5 profit target, then drifted back. It happens. Interesting week coming up with the long awaited FED

Stop loss moved to break even.

I have moved the stop loss on yesterday's AUD CAD trade to break even. It's something I rarely do but on this occasion, two 1hr swings have now formed above the entry price. And as the environment is so changeable at the moment, it makes sense

Trade photo.

It's a relative fundamental trade, based on a still 'hawkish RBA' and a 'dovish' BOC. Placed in a risk environment I would say is neutral / mildly positive. The chart has momentum, breaking out of 1hr resistance. It's a 30 pip stop loss

Live trade.

The ECB'S concerns about growth in the Eurozone doesn't appear to have spooked the market. The VIX remains below 20 and the S&P is 'holding steady' in what I would describe as a 'neutral / mildly positive risk environment. I've

ECB on the agenda.

The ECB has an interest rate meeting today. There is an expectation for a rate cut and dovish narrative. I have read an article suggesting the dovish sentiment for the EURO is a little overdone and a 'hawkish cut' could see the EUR strengthen today. It will be

Currency overview.

I can't start a currency overview without mentioning the 'risk environment'. Which is currently (and has been for a while) the dominating factor when it comes to currency movement. I must confess, I thought once central banks started to cut rates, the relative strength and weakness

Gathering of information.

You may have gathered that this method of trading relies on understanding the fundamentals of 'the market' and the news of the day. Then reacting to the likely correlations. For example, in a 'risk on' environment, the go to trade is a commodity currency traded long

Weekly review.

I began the week starting Monday 30 August with a bias for 'risk on' trades. And the JPY weakened on Monday, although it was in 'low liquidity' due to labour day. But by Tuesday, the tide started to turn and negative sentiment started to creep in,

Friday 6 September: post NFP.

NFP is reported soft...but not too soft. All in all, my initial thoughts are, although the 'headline number' is a below forecast....it is 'soft landing data' due to the unemployment rate coming down a little... and average earnings going up a little. At the

Thursday 5 September.

It appears mixed US data has the market waiting for NFP before deciding on it's next move. ADP jobs data was reported lower than forecast. And it looked like the 'risk off' sentiment would continue. But a decent jobless claims number and higher service PMI data

Trade photo.

It's a 'risk off' trade. In an attempt to take advantage of the relatively sour mood due to soft US data. I think the mood may remain pensive ahead of NFP. I've gone with a 40 pip stop loss and 60 pip profit target.

Live trade

I was a little reticent to trade 'risk off' after yesterday's soft ISM data. Especially as AUD JPY was approaching daily support. But that support is now being broken as 'soft' job openings data adds to the sour mood. I've entered AUD