Weekly review

This week began with calm tones, helped by China's attempts to boost its economy. The good mood continued on Tuesday with 'bad news is good news' data from the US, which I felt created a 'risk on' opportunity. The dollar was so weak that it couldn't be ignored and I placed a EUR USD long trade. The good mood continued on Wednesday with the release of more soft data, this time PCE and GDP giving credence to the feds hiking cycle coming to an end. I chose the JPY to short this time, again against the EUR, which still has sticky inflation and at the time was strong with talk of more hikes to come. By Thursday's European session, the dollar and yen had strengthened, I felt likely due to profit taking ahead of yet more data due to be released from the US. This time, core PCE showed that inflation, although peaked is still not coming down as quickly as the fed would like to see. Combined with a still robust jobs market, the focus turned back to higher rates for longer. Which brings us to Friday and NFP. where the highest unemployment rate in 18 months initially sent the dollar tumbling and 'risk on' was very much the theme. The CAD was also hit hard by disappointing GDP and as the CAD often tracks the dollar due to proximity, and because it was the weakest currency (including vs USD) I I placed a NZD CAD long trade. Only for the positive sentiment to completely reverse with bond yields sharply up, stocks down and a 150 pip turnaround in USD JPY. I need to do some more reading but my initial thought on the cause of the turnaround is higher prices paid in the ISM data, which brings us full circle and back to a possible higher for longer, long dollar scenario. That brings us to the end of a complicated week. On a personal note it was disappointing to start with a hit profit trade and end with two stop outs. But that highlights the importance of staying disciplined, focus on making good decisions, trust the mathamatics and over time the account will be in profit. It's a long game.

I will start next week with an overview of my thoughts on each individual currency. But for now, have a great weekend!

Results for week:

Trade 1:  EUR USD +1.5

Trade 2:  EUR JPY   -1

Trade 3:  NZD CAD -1

Total:      -0.5

Total since start of blog = +3.5%