Tuesday 26 November

It's currently another one of those weeks where I either can't explain, or don't have confidence in the currencies moves.

The week started with USD weakness, thanks to the appointment of Mr Bessent sending US yields lower. But I didn't have confidence in sustainable USD weakness, since it's against the ongoing strong dollar tide. Which is thanks to the strong US economy and perceived slower rate cuts.

Falling US yields, lent itself to a positive risk environment, the VIX is below 15 and the S&P is hovering near all time highs. Which 'should' mean 'risk on trades'. But I can't explain the CHF, JPY and EUR strength. Particularly as all the noises coming from Europe signal faster rate cuts are needed.

Finally, fresh 'tariff' concerns hitting Canada would suggest a USD CAD long trade is viable, but the chart is 'pulling back' too strongly to have confidence in a USD CAD long trade.

Maybe I'm missing something, or maybe it's just 'end of month positioning'. Maybe I'll read something to suggest I need to switch my bias from either 'interest rate differential', or 'risk on' trades.

But until I do, it's a case of staying patient and waiting for everything to align with my thoughts.

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