Thursday 21 November: A strange week

It's been what I would call a strange week in the Forex market. The stand out performers so far have been the CAD, thanks to positive data cutting back BOC rate cut bets. And the AUD, thanks to the still hawkish RBA and a dialing back of china concerns.

But elsewhere, movement hasn't quite been as I would have expected. Higher than expected UK inflation hasn't helped the GBP and today, the BOE's Ramsden insinuates rate cuts could still be swift.

The USD has had a disappointing week, for all intents and purpose, all indicators still suggest a slower cutting cycle and higher terminal rate. But dollar strength hasn't kicked on as I would have expected. The DXY and US yields have been flat. Is it just a sustained period of USD profit taking? Or is there an underlying force at work?

The JPY has had a 'down and up' week as the uncertainty surrounding the timing and how many (if at all) future hikes continues.

The EUR continues to come under pressure. But EUR USD and EUR JPY sitting at strong 4hr support means it can't be shorted at the moment.

The CHF has been stubbornly strong ever since the Ukraine narrative at the begining of the week.

The risk environment in general has been mixed, with the VIX moving up and down on a daily basis. Not up enough to place a 'risk off' trade, but with an underlying tentativity to put me off a 'risk on' trade. Should the market be concerned about higher for longer US rates and the UKRAINE situation? Or should the market be cheering a strong US economy and positive NVIDIA earnings?

I'm currently chalking this week down as one of those weeks when when your views don't align with the 'price action'. At the moment I maintain my bias for USD and AUD longs, it's particularly pleasing to see the AUD regain some strength. But I'd like to see it break 4hr resistance on AUD CHF in particular before feeling confident in a trade.

Feel free to email any questions, you might have a different view: johnelfedforexblog@gmail.com