Weekly review

I would describe last week as an environment where it was difficult to form a conviction in a trade. Monday was a quiet day as it was labour day in the US and Canada. When Tuesday came and things got going, the theme was strong dollar due to the good news is bad news thanks to good Data from the US continuing the higher for longer narative. I felt an AUD USD trade was viable, particularly after poor data from china. The difficulty came as I felt the dollar, whilst strong, was a little stretched against all the currencies and struggled to break through support, particularly against the commodity currencies. The only notable 'catalyst' during the week was from the GBP thanks to a comment from Bailey saying that inflation will fall faster than is expected. This gave the pound a bout of weakness, that although I felt would be short term, I did think it was tradeable and placed a GBP USD short trade. Because I felt the GBP weakness would not last too long, it was a trade where I moved the stop loss to break even. Thursdays data from the USl was again  dollar positive but again I felt the dollar was at too much resistance. Then in the Asian session on Friday, the BOJ tried to verbally intervene by talking up the possibility of monetary policy change, this gave the yen some brief strength. But because the verbal warning didn't particularly sound urgent, by the early European session on Friday this strength was starting to reverse. Which I felt created a JPY short opportunity. I traded it against the dollar, which in my opinion is currently the most attractive long in town.

Next weeks main event is the CPI data from the US. With the oil price on the rise and the economy doing so well, the fear of a re-acceleration of inflation could creep in. Also, data from Britain will be interesting, will the market re-evaluate the UK'S potential rate hikes?

Results for the week:

Trade 1:  AUD USD  -1

Trade 2:  GBP USD   0

Trade 3:   USD JPY   +1.5

Total =   +0.5

Total since start of blog = +4%