US session. Tuesday 17 October.

Easy come easy go for dollar strength today. Hotter than expected retail sales initially gave the USD strength on the higher for longer narative. Only for the moves to completely reverse once the dust settled. With the dollar index breaking below 4hr support and the S&P now higher on the day. My take on the situation is.... Given softer CPI numbers from both Canada and new Zealand, combined with solid retail sales from the US (plus a good start to earnings season from the banks)...plus the jobs market holding up well... It all boils down to a soft landing, and that's what I think the market is saying today. Which would lend itself to a 'risk on' trade. The question is, which currency to short? Is it time to short the dollar? (Which would seem strange given such good retail sales) or to stick with short JPY? The risk to any trade would be the market changing its mind, any rise in tensions in the middle east or the ever present threat of JPY intervention.