Weekly Review
For a large part of the week starting Monday 22 June, USD buying was incessant. The 'FED will hike narrative', combined with fresh AI overvaluation concerns, ensured the USD was the currency in demand. But the tide slowly started to turn, in-line with expectations PCE data, created a 'FED pause rather than hike' rhetoric. Plus excellent MICRON earnings somewhat alleviated AI concerns. Which led us to a crossroads as the new week begins.
I spent most of the week waiting for the USD to pullback. That pullback eventually came, whether it turns into genuine USD weakness will likely be determined by the next round of USD data. As for the AI narrative, MICRON steadied the shop but OPEN AI pushing back the I.P.O date has led to more scrutiny.
It all leads me to begin the new week without a clear bias, especially with the US / IRAN story quietly running in the background. A keen eye must be kept on the HORMUZ STRAIT and an eventuall date of a full re-opening. I'll also be keeping an eye out for for guidence on the USD's direction, especially the DXY and the US 2 YEAR YIELD.
In other news, despite multiple verbal attempts, fundamental sentiment remains subdued for the JPY. With USD JPY comfortably above 161, I envision the 'warnings' will only get louder.
It had been long since telegraphed but the UK will be getting a new prime minister, the GBP fluctuated a little on the news as the market digests the implications. But for the time being, it appears the GBP will be controlled by the overall market environment rather than political uncertainty.
On a personal note, it was a week of two trades. I wanted to long the USD for a large part of the week, but I spent a lot of time waiting for a pullback. I did place a GBP USD short trade on Tuesday, it was quite a bold trade as it was placed on a breakout rather than a pullback. But it was a trade closed in profit by the end of the day.
Rightly or wrongly, on Wednesday I felt the USD strength was very overbought and I stayed out, especially as a lot was being spoken about the upcoming MICRON earnings.
By Thursday, MICRON had reported and US PCE data wasn't 'scary' as the market has feared, I felt there was enough juice for a 'risk on' trade, I placed an AUD JPY long. Which I closed before end of day in a very small profit.
On Friday, I felt there wasn't enough certainty in a narrative to place a trade, which brings us to today. And I'll let the market tell me what it thinks on Monday.
Results:
Trade 1: GBP USD +0.8
Trade 2: AUD JPY +0.3
Total = +1.1%
Total since start of blog = +57.2% (risking 1% per trade).