Weekly Review
Towards the end of the week starting Monday 8 June, it transpired that the M.O.U is very close to being signed. The price of oil dropped below $90, the clearest signal yet that market anticipates oil flowing through the Hormuz strait sooner rather than later.
But for a large part of the week, it looked like the M.O.U was a long way from being signed. And actually, buying USD weakness was a good strategy for most of the week. As every glimmer of hope was dashed and the recently solid US data ensured the dollar was supported.
But that all changed during Thursday's US session, President Trump's (apparently 40th) 'close to the end' announcement flipped the narrative. All we needed then was confirmation from Iran. Which did eventually come but not before some back and forth (more media leaks and misinformation).
So what now? We are told the M.O.U is likely to be signed on Sunday. Whilst this doesn't mean peace is restored, we'll hopefully get a date for the reopening of the Hormuz strait. And hopefully, it'll all go quiet as negotiations continue, with the market focusing its attention elsewhere. If this is the case, we will likely be looking for 'risk on' trades.
If the M.O.U doesn't get signed on Sunday, we'll likely be back to buying USD weakness.
In other news, the SPACE X I.P.O grabbed a lot of attention, unable to be added to the S&P for 12months, it is now a part of the NASDAQ. And it's just something else to be aware of as it has the potential to move the index in a similar way to NVIDIA and the other mega cap tech companies.
The BOC (hold) and ECB (hike) did hold interest rate decisions during the week. Unable to give much forward guidence, it boils down to when the strait of HORMUZ will re-open an how entrenched inflation might already be.
On a personal note. It was a week of two trades. Both attempts at 'buying USD weakness'. An AUD USD short during Wednesday's US session, which hit profit. And a USD CHF long during Friday's European session, at that point I was sceptical Iran would confirm president Trump's positivity. The trade stopped out once they did.
During Friday's US session, I felt the narrative warranted a 'risk on' trade. But the 'price momentum' plus USD and JPY 4hr 'support' kept me out of the market.
Arguably, I missed a USD long opportunity on Tuesday, when the dollar initially weekend post US CPI data (The data was in-line with expectations, thus, not weak enough to significantly weaken the USD).
As we move into the new week, it's all eyes on whether the M.O.U will be signed or not.
Results:
Trade 1 AUD USD +1.3
Trade 2: USD CHF -1
Total = +0.3%
Total since start of blog = +54.5% (risking 1% per trade).