Weekly review.

It was difficult to form a conviction in the direction of the currencies during the week starting Monday 24 June. The previous Friday's higher ISM data had shown inflation in the service sector was still high (higher inflation= delayed rate cuts= chance of a hard landing). And this week, higher CPI in Canada and Australia added to the possiblity of inflation re-accelerating. Which left 'the market' unsure which way to turn.

It's the uncertainty which makes trading difficult. When the market has clear conviction in a scenario, it is much easier to have faith in the future direction of the currencies.

The market wants to price in a soft landing and I currently still believe that's where we are heading. But it could be a bumpy journey as the FED waits for data to soften just enough to cut rates but not too much as to cause a significant slowdown.

In other news, USD JPY comfortably passed 160, despite plenty of 'verbal jawboning' from Japan. The current 'analysts consensus' is for USD JPY to hit 165 before the BOJ intervenes again. And short JPY 'interest rate differential' trades remain my preferred strategy, when the market is in a positive mood and when a stop loss can be placed behind 'nice 1hr support'. And if intervention does occur before 165, that's just a risk we will have to accept.

As a new quarter begins, I'll begin the week by gauging the markets mood as it digests Fridays PCE data, which was slightly soft and should be construed as good news.

On a personal note, it was a week with two trades, an AUD CHF long 'interest rate differential trade', which stopped out and subsequently went on to hit the profit target (it happens). And a GBP USD long 'pre PCE anticipation' trade. Which also stopped out.

All in all a disappointing week, but as I like to say, the only thing that matters is how you move forward.

Results for week:

Trade 1: AUD CHF -1

Trade 2: GBP USD -1

Total = -2%

Total since start of blog = +22.7 % (risking 1% per trade).