The week ahead / What did I miss last week?

I arrived home in the early hours of Sunday morning following a lovely week celebrating my sister in law's wedding. I thought I was going to have time to trade throughout the week but unfortunately time got away from me, I apologise for my lack of narrative last week.

If anyone is curious, Dubrovnik is a very nice place, a walled city that is very impressive with spectacular sea views and hot weather. I can definitely recommend a visit there.

I did manage to keep an eye on some headlines throughout the week. It appears that rising oil and yields were the main topic, causing a generally negative mood. Although, it seems to me that once again, despite the concern of the price of oil keeping inflation high, the currencies didn't fully embrace a 'risk off tone'. Rather, I think interest rate speculation continues to drive currency movement. The CHF being the prime example, unable to strengthen despite to market's inflation concerns.

A quick look at a daily currency strength meter paints a fairly decent picture:

The two at the top, AUD and JPY are the currencies with 'the most juice left in the rate hike tank'. The CHF is the currency with no hikes on the agenda, the NZD has been under pressure since the market took the recent RBA meeting as dovish. Likewise, the rent BOC meeting was seen as quite hawkish (the CAD also helped by rising oil).

The rest of the currencies are vying for position in the middle.

It's a big week ahead, only a few weeks ago, it appeared there was a chance of no further FED hikes this year, but we enter the Fomc Meeting with the possibility of two hikes before year end. The BOJ also has a meeting this week, the market has recently priced a more aggressive than previously thought hiking cycle , will the BOJ live up to expectations?

I begin the new week maintaining my bias for short CHF trades, aware that if the price of oil continues to rise, it may not be long before we start to see the currencies behave in a true 'risk off manner'. There is also a case to say AUD NZD could keep rising, I would need to see a pullback creating solid support before placing a trade.

I'm looking forward to getting stuck back in this week. Please feel free to get in touch with any thoughts or questions: johnelfedforexblog@gmail.com