PMI and BOC on the agenda.

Another day, another bout of AUD and NZD weakness as china concerns contribute to falling commodity prices. And it looks like not trading USD or JPY long was the wrong decision.

And if anyone did, based on china fears and falling commodity prices, there is a strong case to say it was a shrewd decision.

But, for me, if you put me back sat at my computer on Monday. I still say I wouldn't have taken a 'risk off' trade. I still think the hawkish RBA will halt the AUD decline. The soft landing narrative could turn sentiment positive at any moment, the china fears could abate. And I still think there is 'JPY mean reversion' and fundamentally, the yen should weaken again soon.

But, when will I be forced to alter my opinion if the 'risk off' currency movement persists?

If the upcoming PMI data is particularly negative, worldwide growth fears could really cement negative sentiment.

Conversely, positive PMIs could just as easily see a return to 'risk on'.

Wednesday also brings us a BOC rate decision. A cut has been expected but a 'dovish hold' is also a strong possibility. The CAD could move on the news. And I will assess the environment tomorrow and decide if I think a pre event 'anticipation' trade is viable.

Feel free to email any questions: johnelfedforexblog@gmail.com