Weekly review

Week starting Monday 18 December:

Monday was a quiet day, with all eyes tuned to the BOJ interest rate meeting on Tuesday. There had been strong speculation that govoner Ueda would signal an immediate change of policy by raising rates out of negative territory. When the meeting came and no change was announced, this weakened the JPY, creating a very viable trade opportunity. (Speculation about Japan changing policy has been an ongoing theme for over 12 months now, and every time yen bulls have been disappointed. which has created short JPY opportunities).

Once the dust had settled from the Japan meeting, attention turned to economic data from the US. With GDP and core PCE both coming in softer than forecast. Which is exactly what the FED wants to see and maintained the 'risk on' theme, with bond yields lower, socks higher and a weak USD.

In other news, lower than forecast inflation from the UK caused speculation that the BOE will cut rates sooner than expected, weakening the GBP. Moving into the new year, speculation over which banks will cut rates first will likely play a major part in the direction of the currencies.

I won't be trading between Christmas and New year, I'm taking a week off to recharge and spend time with family. There won't be any major economic releases and volume will be low. But that doesn't mean there won't be opportunities. Quite often a quiet market will grind up (or down) in the direction of the prevailing 'trend'. Which means if I was trading, I'd be starting the week thinking short USD or JPY trades are a viable option. Especially if a stop loss can be placed behind a couple of 1hr swings.

Results for week, I placed three trades:

Trade 1: NZD JPY +1.5

Trade 2: USD CAD - 1

Trade 3: AUD USD + 1.5

Total: +2% (risking 1% per trade)

Total since start of blog = +21.5%

Please Email if you have any questions: johnelfedforexblog@gmail.com

Best wishes, John