Wednesday 17 December: A little stumped.

I must say that I'm currently struggling to have confidence in the near term direction of the currencies.

What I 'think' should be happening and what's happening are two different things.

I'm surprised by how weak the AUD is, which I can only put down to either 'China concerns,' or 'profit taking'.

Given the data and 'relativly dovish' fed speak, I still suggest the USD 'should' be weaker.

The S&P remains sour (AI concerns? Profit taking?) but the VIX remains below 20, therefore I can't find the confidence in a 'risk off' trade.

All the talk is that the BOJ have multiple rate hikes incoming, yet the JPY is quite weak, even whilst the S&P is under pressure.

Once again, the GBP significantly weakened on soft data, only to recover. I would suggest a GBP short 'in the moment news trade' was viable for anyone at the charts at the time of the CPI release. But a quick look at the 'down and up price action' in the hours following, confirms the uncertainty of the times.

All the while, the CHF continues to outperform.

Maybe I'm missing something, maybe you have a different opinion than me, perhaps you've had confidence in an AUD short trade based on recent data coming out of China.

All we can do is form out own opinions and make decisions based on those opinions. Which for me, means waiting to see what the busy upcoming 24 hours offers (NZD CPI, BOE, ECB, US CPI, BOJ).

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Please feel free to email any thoughts or questions: johnelfedforexblog@gmail.com