Tuesday 17 January.

A combination of weakish data from china and a rate cut pushback narrative from Europe and the US continues to keep risk sentiment tepid. The dollar strength from yesterday has continued and the JPY is the standout weak performer in correlation with rising yields. It is difficult to envision this narrative changing today, especially if US retail sales data comes in higher as expected. This would create a 'good news is bad news' scenario (if people are spending money at a higher than expected pace, this means inflation will fall slower).

In other news, the UK reported a higher inflation reading this morning, which has overridden yesterday's slow wage growth and talk of a potential rate cut in May Is being pushed further out. This adds the GBP the the potential currencies to long list. Along with the USD and EUR.

With yesterdays trade complete, I'm currently waiting for any little pullbacks on the JPY charts to create some 1hr support to place a stop loss behind. Then I think a JPY short trade would be very viable. Unless the AUD and NZD suddenly become much weaker than the JPY, in which case, it could be an AUD or NZD short.

If you have any questions, please email: johnelfedforexblog@gmail.com