Weekly Review
There was a couple of events of note during the week starting Monday 6 July. But all in all, it felt like the market was waiting for the outcome of the upcoming US CPI data before forming any decisive opinions.
Just when it appeared we were heading to a peaceful resolution in the middle east, the M.O.U broke down. But after a brief period of negativity, any angst appeared to be swept under the rug as the price of oil couldn't close above 75.
The FOMC minutes, from chair WARSH'S first meeting in the hot seat, were fairly hawkish but perhaps not as hawkish as the market was expecting. US YIELDS rose throughout the week but the USD didnt quite follow suit. As mentioned, perhaps we are waiting for CPI data on Wednesday 25 July.
The most noticeable currency of the week was the NZD. What I would describe as a 'neutral hike' provided a base for the kiwi. Which then really kicked into gear later in the week when 'hot data' gave credence to further rate hikes.
Of course, barely a week goes by without some kind of verbal attempt at stemming JPY weakness. A suggestion pension funds could be re-allocated seemed the give the JPY some strength. But for the time being, I still consider periods of JPY strength will ultimately turn into 'short yen opportunities'.
The other currencies I currently consider as 'short opportunities' are the CHF and the CAD. In what could be termed 'interest rate differential trades'. (Negative war news not withstanding).
On a personal note, it was another mildly disappointing week. Before the M.O.U. broke down I was looking for 'risk on' trades. But didn't find myself at the charts at the right time.
I then perhaps read too much into the negative war news, placing a AUD USD short. Which was closed for a small loss when the negativity didn't escalate.
I then reverted back to looking for 'risk on' or 'interest rate differential' trades. But once again didn't find myself at the charts at a time I felt confident in a trade. On Friday, I was 'hoping' Canadian data would create a short CAD opportunity but that was scuppered when the unemployment data came in better than forecast. Incidentally, I don't think the data will be enough to give the CAD sustained strength.
As mentioned, I'll begin the new week with an eye for interest rate differential trades. Being aware that CPI, WAR ESCALATION, CHAIR WARSH and the start of EARNINGS SEASON, could create fresh rhetoric as the week progresses.
Results:
Trade 1: AUD USD -0.3
Total = -0.3%
Total since start of blog = +55.9% (risking 1% per trade).