Weekly review.

I found the week starting Monday 20 May a slightly frustrating week, as my bias for the currencies didn't quite align with the 'price action'.

I felt a hawkish RBNZ should have seen the NZD stronger than it was.

The AUD was fairly weak and I couldn't put my finger on why.

Inflation is still too high in the UK and contradicts an increasingly dovish BOE.

The JPY spent the early part of the week stronger than I felt it should be as JGB's rose above 1%.

A September rate cut from the FED is put into question as the FOMC minutes were more hawkish than expected combined with higher service PPI. Bringing back the 'higher for longer in the US' narrative and supporting the USD.

Soft inflation from Canada keeps June as the most likely timing of the BOC's first cut. And perhaps CAD short trades should have been more on my radar.

All amongst the backdrop of the VIX remaining low, Nvidia once again reporting solid earnings and guidance, (it currently appears there is nothing standing in the way of Nvidia stock steadily climbing for the next 12 months). US Yields rose slightly during the week, but nothing 'scary' enough to damage risk sentiment.

A piece of 'good news' on Friday, consumer confidence is up but consumer inflation expectations are down, which backs up the long term 'soft landing narrative'.

All in all, I begin the new week with a bias for 'interest rate differential trades'. Which still means short JPY, CHF or possibly CAD.

On a personal note, it was a week of two trades, an AUD JPY, a 'soft landing risk on' trade which stopped out and a USD CHF, service PMI 'catalyst' trade, which was ultimately closed on Friday for break even.

You often find the currencies don't quite move how you'd expect. It happens, the important thing is to keep gathering information and keep forming opinions.

Results for the week:

Trade 1: AUD JPY -1

Trade 2: USD CHF 0

Total = -1%

Total since start of blog = +24.5% (risking 1% per trade)