Weekly Review

Not for the first time this year, opposing forces battled it out during the week starting Monday 13 July. Two benign US inflation metrics providing the good news. A rise in the price of oil, caused by a re-escalation between the US and Iran, plus a semi conductor 'sell off', provided the bad news.

As the new week begins, it's difficult to predict which narrative will ultimately win. But I do find it interesting that, as far as I can tell, the currencies (in the main) are adhering to 'interest rate differential'. Which just so happens to echo a 'risk on correlation', if this 'price action' remains the same, that means AUD, NZD, GBP remain the long opportunities.

Of course, if only it was that simple. The UK has a new prime minister incoming, which could create confusion. And the AUD / NZD are heavily tied to CHINA'S mixed data.

The USD and EUR also come with subjectivity, both central banks are talking the talk. But the market can't decide if more rate hikes are coming or not.

The CAD got a bit of respite this week, thanks to the rising price of oil and a 'less dovish than expected' BOC meeting.

The JPY situation remains complicated, the BOJ seemingly reluctant to hike rates further, whilst simultaneously warning against rapid JPY depreciation. I have recently read that USD JPY 'could' reach 170. The JPY remains on my 'to short list', along with my preferred choice of short at the moment: the CHF. The SNB remain comfortable with a 0% interest rate and intriguingly, the CHF continued to weaken during the week's negative headlines, at least it did until Friday's negative European session. For the the being, similar to the JPY, I view CHF strength as a potential 'short CHF' opportunity.

On a personal note, it was a week of two trades. Wednesday's GBP CHF long hit profit. Thursdays NZD CHF was closed for a small loss before end of day.

As the new week begins, a lot will depend on whether the price of oil keeps rising. Plus 'earnings season' ramps up, which is worth keeping an eye on.

Results:

Trade 1: GBP CHF +1.5

Trade 2: NZD CHF -0.3

Total = +1.2%

Total since start of blog = +57.1% (risking 1% per trade).