Weekly review.

Down the line, we may look back on the week starting Monday 29 April as the moment the 'tide started to turn' for the USD.

Recently, an undeniably strong US economy combined with hawkish FED speak as kept the USD on the front front. And the week started off with concerns the next move could possibly be a rate hike.

But on Wednesday, chair Powell's press conference, deemed surprisingly dovish, put the markets mind at ease. And Fridays NFP data (surprise drop in the headline number, combined with lower wage growth and higher unemployment) backed up the return of the 'soft landing' narrative. And all of a sudden, two cuts are back on the table.

Although it's too early to call a top in the USD, the next round of inflation data will be very interesting. And I currently expect to start the new week looking for potential 'risk on' opportunities.

In other news, (apparent) well timed intervention from Japan post FOMC added to USD weakness. But in my opinion, the JPY strength will ultimately become a JPY selling opportunity. Also, higher than forecast inflation from Switzerland gave the CHF a bout of strength. But not enough to derail the dovish narrative from the SNB, therefore, CHF shorts remain firmly on my radar.

It's a quiet week ahead on the US data front, but interest rate decisions from Australia and the UK, plus retail sales from Europe, Canada employment data and UK GDP may provide volitility. Plus I'll be keeping an eye on the 'risk environment' for the possibility of 'risk on' trades.

On a personal note it was a disappointing week of three trades. All were 'interest rate differential' trades. Importantly, I don't regret taking them. Although two stopped out and one was closed before NFP for a small profit. But just like life, in trading especially, the only thing that matters is how you move forward.

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