Weekly review.

A fairly muted week in the forex market compared to the central bank bonanza the previous week. But there were opportunities non the less, mainly deriving from the swiss franc. A currency I've not traded for a few years, which serves as a reminder to always expect the unexpected and to evolve your ideas where the data takes you.

There wasn't much headline data to work with, particularly at the beginning of the week, but the CHF maintained it's weakness caused by the SNB's surprise rate cut on 21 March. Ideally, the JPY should have joined the CHF on the potential to short list but the BOJ (as ever) tried to 'jawbone' the JPY with comments threatening intervention if the currency gets too weak. It seems to me the market it's tired of the BOJ's antics. And I'm hopeful the JPY will again be used as the funding currency for the 'carry trade'. But until CHF JPY has upward momentum on the 4hr chart, it makes sense to stick with CHF shorts for the time being.

Regarding the other currencies, there isn't much disparity in the economies, which makes it difficult to form an opinion of potential strength or weakness. Although soft retail sales from Germany and the fact inflation is falling faster than expected in the eurozone could see the calls for an earlier cut than June get louder. And unless EUR USD can get back above 1.08, the EUR could find itself under pressure.

Stocks and bonds were fairly flat during the week, with the S&P still floating around all time highs and the US 10YEAR hovering around 4.2. I'll start the week by keeping an eye on the 10year, if it remains around current levels, combined with recurring data suggesting a strong US economy, USD CHF long will be an option. But if yields roll over in a positive risk environment, AUD CHF long could be the choice.

The week ahead to follow.

Results for week:

Trade 1: USD CHF +1.5

Trade 2: EUR CHF -1

Total= +0.5%

Total since start of blog= +18% (risking 1% per trade).

Feel free to email any questions: johnelfedforexblog@gmail.com