Fundamental analysis

Trading Discussion Trade Journals
62

A BUSY 24 HOURS FOR THE MARKET:

It’s been a busy 24 hours for the market, starting with the FOMC. As expected rates were held, initially, the market liked the statement and press conference. Due to a combination of a reduction in the ‘balance sheet run off’ and thoughts that any inflation pressure caused by tariffs will be temporary. I watched the press conference and was very impressed by Mr Powell. Often maligned, I personally believe history will shine very favourably on how he’s navigated an impossible job.

The ultimate takeaway from the FOMC is, currently, two more US rate cuts are still expected this year.

It didn’t take long for uncertainty to kick in again and any post FOMC positivity has unwound.

Next up, the SNB cut rates. (*Seperate note…a CHF short ‘market order’ pre event is an example of the 'market order anticipation trade I’m currently testing. More on that in the coming months). It does appear the SNB have come to the end of the ‘rate cut cycle’. And the fairly hawkish narrative ensured the initial CHF weakness unwound. But I still expect the CHF to be the ‘go to’ interest rate differential trade when the market is ‘risk on’.

The BOE held rates and remained relatively hawkish. And the GBP remains a good ‘long option’ in a risk on environment.

It was always going to be difficult for the central banks to be anything other than ‘cautious’ given the current environment and fears of rising inflation expectations.

In other news, the price of oil is up on the possible ‘quelling of production’. And the AI woes for APPLE continue, it’s back to the drawing board as they can’t quite implement AI into phones. The share price is down, taking the tech sector with it.

All in all, There is a lot to be positive about and a lot to be negative about. But despite a busy narrative these past 24 hours, I remain in exactly the same place. Not confident enough to place a trade.

The tariff cloud continues and I either need to see the sun burst through. Or, the cloud to get darker and start to rain. And I’m currently content to continue reading, forming an opinion on the narrative and only trade when I’m convinced a currency is going one way or the other.

Please get in touch with any thoughts or questions. I’ve come across many ‘difficult periods’ but this one is particularly difficult.

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WEEKLY REVIEW:

The week starting Monday 17 March began with positive rhetoric and data from China. I became hopeful the recent negativity had peaked and ‘risk on’ trades would become viable.

But as the week progressed it became apparent the market wasn’t ready to dismiss ‘tariff uncertainty’. And we became stuck without clear direction. And it looks like the uncertainty is going to continue until the much mentioned date of April 2 provides clarity one way or the other.

In amongst the ‘tariff uncertainty’ we had four central bank meetings. It was always going to be difficult for any of them to provide much clarity, instead citing the uncertainty of the moment as a reason to remain cautious. The BOJ remain ‘relatively hawkish’. The SNB appear to have reached the end of its cutting cycle, but I still expect the CHF to be very tradable ‘short’ once the market returns to ‘risk on’. The BOE held rates and remained cautious, with no immediate signs of another cut. The FED meeting was particularly interesting. Whilst remaining cautious (Mr Powell repeated the uncertainty word many times) but delivered a very subtle ‘FED PUT’, firstly, by announcing a reduction in quantitative tightening. Secondly by offering assurances if the labour market deteriorates too quickly, action will be taken.

The market initially liked the news. But the positivity didn’t last long as thoughts returned to that mystical day, April 2.

Throughout the week I did an awful lot of watching, reading and listening. I watched the FOMC and an observation I think is worth noting…post decision, pre press conference, I was watching Bloomberg and watched a very calm ‘guest’ try to explain his reasons for thinking, ultimately the market will recover…whilst being baited by the presenters into providing a negative rhetoric. I think it’s worth noting that Bloomberg in particular loves to whip up a frenzy of negativity.

I’ve also listened to CNBC a lot this week (via podcast). Halftime report and closing bell. I found Thursday’s (closing bell) interview with Jeffrey Gundlach particularly interesting.

Ultimately, everyone is stumped in the mire of this ‘tariff uncertainty’. The consensus is that sentiment will recover, it’s just whether there is a fresh leg of negativity before then.

And sentiment won’t be helped by both NIKE and FED offering ‘poor guidance’. There is a case to say any NIKE woes are company specific but FED EX is a good barometer for the overall health of the market.

Throughout the week I noted the cloud remains and we either need the sun to come out, or for the cloud to turn darker and start to rain. And that’s how I’ll begin the new week. In fact, I wouldn’t blame anyone for taking next week off. Personally, I’ll continue ‘gathering information’ and we may just get an ‘out of the blue’ catalyst. But it would need to be a big move with a very strong reason behind it for me to place a trade.

On a personal note, on Tuesday I got tempted into trading the china positivity / USD weakness. But it didn’t take long before a tariff comment knocked sentiment. And that three losing trades in a row now, a very good example of why it’s essential to only risk a very small portion of your account per trade.

Results:

Trade 1: NZD USD -1

Total= -1%

Total since start of blog = +34.1% (risking 1% per trade).

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LIVE TRADE:

Having begun the week thinking there may not be any opportunities, I think the positivity caused by potential ‘relaxing of tariffs’ and solid US PMI data, is ‘strong enough to trade’.

I’ve chosen AUD as the long, due to positive AUD PMI data. And likewise, I’ve chosen JPY to short due to ‘soft’ JPY PMI data.

It’s a 30 pip stop loss with 45 pip profit target. Entry at 94.39

The profit target is well below 4hr resistance.
The risk to the trade is the potential of a change in sentiment , which is very possible in this changeable market. But with the VIX at 18 and the S&P strong, I think the positivity is too strong to ignore.

65

Tuesday 25 March:

The currencies have reacted a little more negatively to today’s ‘slightly soft’ consumer confidence data than the overall market has done, the VIX (currently) remains below 18.

Historically, consumer confidence data hasn’t been particularly market moving, but in these times of ‘tariff uncertainty’ and concerns of a ‘fresh inflation uptick’, consumer cautiousness feeds growth fears. But ultimately it’s the ‘actual data’ that drives decisions and (at the moment), data is generally indicating healthy economies.

Currently, I view any AUD weakness as a potential ‘buying opportunity’ due to positive PMI data and a ‘surprise tax cut announcement’ likely keeping the RBA on a ‘very slow’ rate cut path.

For the time being, tariff concerns have been put to one side, but we are only ever a comment away from negativity. And (never wanting to wish time away) the sooner April 2 comes and goes, the better.

Currently, it’s a case of taking it one day at a time, maybe even one session at a time. Coming up we have UK and AUD CPI data, US GDP and CORE PCE, JPY CPI. There are plenty of potential opportunities. But quarter end and any mention of tariffs could blur the picture.

Currently, if the VIX remains low, I’m looking for a reversal of AUD weakness. Particularly Vs CHF.

66

Wednesday 26 March:

The day began with ‘slightly soft’ UK CPI data. And although I suspect the news won’t have a lasting effect of GBP weakness, I do think it was a valid GBP short ‘in the moment news trade’. Personally, I wasn’t in a position to trade at 7 am UK time this morning ( I was knee deep in doughnuts preparing for Conwy’s honey fayre). I don’t want to go down the hindsight route of trading advice. But I think it’s important to say that I do think GBP short was a valid ‘news trade’ (regardless of the result) if anyone did trade it. Personally, I suspect I would have plumbed for GBP AUD short. (Slightly lower than expected AUD CPI data hadn’t slowed AUD positivity at that time).

Yesterday I noted that I fancied longing AUD weakness, whilst I think it was an extremely valid thought, unfortunately I wasn’t at the charts to get the timing right to place a trade.

Fast forward to the here and now: The overall positivity has taken a slight knock due to ‘auto tariff news’ but I am ‘mildly enthused’ that ‘tariff negativity’ isn’t currently having a lasting effect. And I’m of the same opinion that AUD weakness is a buying opportunity. (especially as the rising price of copper is AUD positive). I also think GBP could stage a comeback. But both AUD and GBP longs are on the proviso ‘risk sentiment doesn’t slump’. And with April 2 looming closer combined with quarter end, there is a huge possibility of negativity heading into the weekend.

67

WEEKLY REVIEW:

Considering that, in my mind, it feels like Christmas was two weeks ago, it came as a surprise to realise the week starting Monday 24 March was the end of the first quarter.

The week began with a semblance of positivity, the VIX made its way below 20 and the S&P staged a solid recovery as the market grew optimistic ‘tariffs’ were going to be dialed down. Positive US PMI data helped the good mood.

The AUD in particular was a beneficiary, as positive AUD PMI data and suggestions of tax cuts combined with the ‘risk on’ market tone. The JPY was the currency hit hardest by the positive feeling during the early part of the week.

But, alas, by Friday, news of ‘tariffs on autos’ and 'slightly higher CORE PCE data sent a shudder through the market and negativity returned. Quarter end could have played a part in Friday’s price action. But on the surface, it appears traders are preparing for a negative outcome to the April 2 announcement, with the words ‘stagflation’ and ‘recession’ prominent in the current market commentary.

And that’s where we begin the new week, I envision the negativity will remain ahead of Wednesday’s ‘judgement day’. Which will potentially offer ‘risk off’ opportunities. But if there are a barrage of headlines, flipping from negative to positive…and back to negative, we could see ‘choppy trading’.

If there are ‘risk off’ opportunities, I would currently favour the JPY as It’s difficult to pin down the future direction of the USD. Not long ago ‘tariff news’ was USD beneficial. But recently, caught in the middle of the ‘dollar smile’, it’s unclear if the USD will strengthen due to ‘risk off’ or weaken due to ‘growth fears’.

In other news, the GBP had a mixed data week, hit particularly hard by ‘slightly soft’ CPI data. But unable to benefit from Fridays positive retail sales data, perhaps that was a sign of the negativity to come.

On a personal note, considering I began the week with thoughts ‘tariff uncertainty’ may result in no trades, it was pleasing to place two. both AUD JPY long, in an attempt to take advantage of the positive environment at the time. The first trade hit profit, the second trade stopped out, but did ultimately rise to the original profit target. It happens, maybe with hindsight I could have set a slightly larger stop loss. But at the time I felt more comfortable with the profit target at the close of 4hr resistance. Rather than aiming for higher than the close of the candle.

Results:

Trade 1: AUD JPY +1.5

Trade 2: AUD JPY -1

Total= +0.5%

Total since start of blog =+34.6% (risking 1% per trade).

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LIVE TRADE:

EUR USD short.

Friday’s negativity has spilled over into the new week. And Having said I prefer JPY, the USD momentum is too strong for me to ignore.

There are a plethora of potential ways to trade this negativity. I’ve chosen EUR USD short, perhaps a slightly left-field option, partially because I think I’m a little late to the ‘standard risk off’ options. (AUD looks a little stretched). Plus I do like the EUR USD chart with room to support. And any recent fundamental EUR positivity as slowly ebbed away.

The risk to the trade is positive sentiment, possibly via a tariff headline.

Entry price 1.0804

It’s a 26 pip stop loss with 36 pip profit target for a 1.4:1 risk reward.

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69

April 2 is upon us, what’s next?

Its been like waiting for the kettle to boil but finally, April 2 is upon us. A tariff announcement is expected sometime around 8pm UK time.

Before that, we’ll get US ADP employment numbers. But it could be that any reaction to the data is muted or short lived as the market awaits tariff news.

No one really knows what to expect, will we get a blanket 20% tariffs on all nations as was once touted? This would likely create a ‘risk off’ reaction.

Or, (I suspect more likely): Will we get country specific announcements? Which would likely create a ‘risk on relief rally’. And we could find ourselves with potential ‘relative fundamental’ trades. According to which country is likely to be affected most. It could be that these trades are viable even if they don’t align with risk sentiment correlation.

Ultimately it’s a case of wait and see. The market and the narrative will suggest potential trades post announcement.

Will ‘liberation day’ be the end of the ‘tariff chaos’? I suspect the uncertainty could continue as we get headlines regarding negotiations. But so much fan fayre has gone into ‘April 2,’ at some point the market will become tired of giving the headlines any credence.

*Yesterday’s trade is still in play. If it’s still ongoing a couple of hours before the announcement I will close it and form a fresh opinion post event.

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Crash, bang, wallop.

Goodness me, we were told to expect fireworks. A lot of people (myself included) were expecting a ‘tamed down’
announcement, the market even seemed to ‘position’ for a positive outcome pre event.

But, true to his word, Mr Trump delivered the biggest trade policy shift in a century.

I wonder if it was Mr Trumps intention to ‘tank’ the USD. I have no idea, if it wasn’t, as Mr Button said, the clowns are running the circus.

There appears to be scope for negotiation, but treasury secretary BESSENT has indicated the US are not in a hurry to negotiate. And we are left with a complicated picture to pick the bones out of.

On the surface, it’s very straightforward, 'risk off ’ trades are viable. If anyone has been ‘long JPY or CHF’ today, I would suggest it was a very valid trade.

I would also suggest it’s valid to think the USD is the only short in town. (Vs whichever currency deemed appropriate at the time). Due fears the administration is going to severely damage the US economy.

Maybe one day, Mr Trump’s grand plan will become clear. But for now. I’m looking to short the USD following pullbacks with ‘nice 1hr’ support.

I’m also treating 'risk sentiment rally’s as a ‘sell the rip’ opportunity (please excuse me using that phrase). Meaning, I’m happy to long the JPY (CHF or EUR) as a ‘risk off’ trade. Again, following ‘pullbacks’.

Very bizzare times, although not necessarily ‘difficult’. At least we have a solid reason for the movements. (You can remind me I said that if my next three trades stop out).

Finally, I’m prepared to be nimble and place ‘relative fundamental’ trades, for example… If the CAD continues to to look like it’s ‘got away lightly’ and there is some negative China news, AUD CAD short is a viable option.

And, of course, NFP is tomorrow. In the interest of ‘the tide’ a ‘soft number’ would likely cement USD weakness moving into next week.

If it’s a ‘hot number’? I suspect any USD strength might be ‘faded’. And although feasible, a long USD ‘in the moment’ news trade would be very bold.

Please feel free to offer any questions or thoughts. You may very well have a different view than I do. And that’s completely fine, it’s important to form your own opinions.

71

LIVE TRADE: AUD JPY short
Entry: 88.87

It’s a ‘risk off’ trade based on the recent very negative market sentiment. I’m treating any positivity from the positive NFP data as a selling opportunity.

Due to the recent high volatility, it’s a 70 pip stop loss with 84 pip profit target. For a Friday 1.2:1 risk reward.

I’ve chosen to take the trade even though it’s on a 15min chart. It could be classed as a ‘catalyst continuation trade’.

The risk to the trade is Friday profit taking or if the market deems the NFP data to be ‘good enough’ to change sentiment.
I’ve chosen AUD JPY simply because it’s the ‘risk off’ proxy pair.

(If it’s still ongoing) I will close the trade before end of day to avoid weekend risk.

72

Weekly Review:

There was only one thing on the markets mind during the week starting Monday 31 March.

The week began on tenterhooks as the previous Friday’s negativity spilled into the new week. Although a semblance of calm did briefly return, for a short time on Wednesday it appeared the market was positioning for a positive outcome to ‘liberation day’ (Tariffs not as hard hitting as feared).

But when the announcement came, bringing into effect the largest shift in trade policy for a century, any positivity was blown out of the water.

President Trump suggests he’s playing 4d chess. I’m not clever enough to agree or disagree. But whether you think it’s the greatest master stoke in history, or the biggest mistake in history, the bottom line is that the market (for the time being) is very concerned. Everywhere you look, analysts are raising recession probabilities from close to zero to 60%. The upcoming earnings season probably couldn’t be coming at a worse time, as we may have to strap in for negative forward guidance, which will only compound the concern.

If nothing else, at least it’s left us with a few trading options.

The negative sentiment does belie the actual economic data, but future growth concerns currently dominate and I’ll begin the new week looking for ‘risk off’ trades, particularly following pullbacks. long JPY, CHF or EUR (interesting to see the EUR replace the USD safe haven status).

There is also a case to say USD short trades are very viable, considering sentiment for the dollar is so sour, it could be that Friday’s NFP data provides the pullback for a USD short.

I also think we could get ‘relative fundamental tariff trades’. If negotiations give a particular currency momentum in either direction, it’s possible that this type of trade could defy the risk environment at the time.

In other news, a ‘relatively hawkish hold’ from the RBA, eurozone CPI data and in fact, any other news that would ordinarily have a lasting effect on a currency was largely ignored.

FED chair Powell also spoke, given the circumstances, he was only going to be able to repeat his ‘wait and see’ mantra. And with president Trump currently looking like he has no intention of softening, it will (likely) come down to the ‘Powell put’ to ease the market’s fears. But that may not be for a while. Chair Powell must wonder what on earth could be thrown at him next, given the torrid circumstances he’s delt with during his tenure.

On a personal note, it was a week of two trades, on Monday I felt EUR USD was going to continue lower. It was a trade that went sideways before stopping out. With hindsight, it was perhaps a (very rare) occasion when, once I’d realised the initial idea didn’t come to fruition, I could have closed the trade at break even long before the tariff announcement.

I unfortunately missed Thursday’s action due to a very frustrating day on the telephone dealing with faulty internet.

But I did get over my complex of trading on a Friday, I didn’t think the positive NFP data would overpower the underlying negative sentiment. I was tempted with a ‘short term USD long’. But opted for AUD JPY short given a USD long would have been against the tide of USD weakness pre NFP release.

Results:

Trade 1: EUR USD -1

Trade 2: AUD JPY +1.2

Total = +0.2%

Total since start of blog = +34.8% (risking 1% per trade).

73

USD JOINS THE RISK OFF PARTY:

The USD has regained it’s poise and realigned itself in the safe haven category. Possibly due to Fridays NFP data, but I suspect more likely due to rising inflation expectations and US yields.

Which currently takes any thoughts of short USD off the table. Leaving (for me) only ‘risk off’ trades as viable at the moment. Which would include the USD as one of the long options.

It’s a question of whether to jump on the momentum, or wait until tomorrow.

Due to the recent volatility, it’s difficult to wait for 1hr swings. So for the time being, I’m watching the 15min charts. AUD, NZD and GBP all look on the verge of breaking down.

But as it approaches the end of the day, I get a sense I’m a little late to the party.

For better or worse, I’m going to wait for a 15 min pull back and reassess.

Feel free to offer any thoughts or ask questions :blush:

74

LIVE TRADE:

NZD JPY short
Entry 82.44

I’m treating the commodity currency ‘pullback’ as chance to take an ‘underlying risk off’ trade. Especially as it appears China is in the main ‘tariff firing line’.

I’ve chosen NZD JPY short. The RBNZ is predicted to cut rates, I will take the trade off before the meeting.

It’s a 60 pip stop loss with 90 pip profit target. The risk to the trade is a continuation of the mildly positive sentiment of the last 12 hours. But I don’t see a solid cause for the positivity.

75

AND JUST LIKE THAT: 90 DAY PAUSE

I was just in the middle of writing about how I didn’t enjoy yesterday’s ‘underlying risk off trade’. It felt very strange taking a risk off trade when the S&P was going up. It was very bold but I felt it was a needs must at the time because I felt very confident the positivity wouldn’t last.

I was then going to say it felt like we are waiting for some fresh news in either direction. And then it happened, a 90 day tariff pause on all except China.

I certainly think it’s a tradable ‘risk on’ catalyst. I’m waiting for a 15min swing or maybe even 5min.

Despite the negative China news, I see AUD and NZD as longable, although it also makes sense to focus on ‘tariff beneficiaries’. GBP in particular is appealing.

Of course, as we know, anything could change at any moment. But for now, I have an eye for a ‘risk on catalyst’ trade.

76

LIVE TRADE.

AUD USD long: entry 0.6204

It’s a very rare second traded in one day. Based on the continued ‘tariff positivity’ plus lower CPI contributing to the good mood.
I’ve chosen the AUD to long this time, simply because it’s the currency that currently has the momentum.

It’s a 30 pip stop loss with 45 pip profit target.
The risk to the trade is ‘fresh negativity’. Which could happen at any moment. But I feel the mood is too positive to ignore.

Feel free to ask any questions.

77

USD V Bargepole:

Market participants are currently doing all they can to distance themselves from the USD. Selling stocks, bonds and the currency. Which has caused a disconnect from the usual correlations. It’s very strange to see the AUD strengthening whilst the S&P is going down.

I don’t see the situation changing until the US and China come to an amicable agreement.

I do still think it’s a tradable environment. Either focusing on USD short as the ‘only trade in town’.

Or, keeping your own narrative sharp and simply saying: I think X will be stronger than Y because Z has just happened. And if it’s not in accordance with correlations, so be it. I’m still confident by keeping and underlying narrative, a 50% win rate is very achievable.

It’s not ideal, I yearn for the days a soft CPI print means a straightforward ‘risk on’ trade with everything in correlation. But we can only work with what’s In front of us, however strange it might seem.

For now, I’m going to see what jobs Michelle has lined up for me in the garden and take advantage of the sun before the rain comes tomorrow.

Coming soon …weekly review and (I promise) how to take advantage of a trade going to plan.

78

WEEKLY REVIEW:

The week starting Monday 7 April was full of news, fake headlines and wild swings. It’s come to something when US CPI data is barley glanced at by the market as ‘tariff headlines’ once again dominated.

The week began with negativity spilling over from the previous Friday. The market was on edge awaiting the next move in the game of brinkmanship between the US and China. Although sentiment did stabilise somewhat as the week progressed. Two ‘positive’ social media headlines were quickly rebuked by the administration (I hope unproven social media headlines moving the market doesn’t become a regular theme).

On Wednesday, we did get a bona fide positive headline from the president himself. A 90 day pause on tariffs for all countries showing willing. Of course, China was excluded (ultimately hitting back). Nonetheless, the S&P rallied 8% on the news.

Unfortunately, the sheer complexity of the situation ensured the 8% S&P rally was followed by a down day on Thursday. And that’s where we find ourselves today, in a twilight zone of a market desperate to go up on positive news, but unable to have faith in positivity due to potential escalation causing growth fears.

In amongst all this, the biggest loser (so far), sentiment wise and price wise, is the USD. All US assets are being sold (stocks, bonds and the currency). And it’s playing havoc with the standard correlations We’ve come to rely on.
It seems to me the market has a lack of faith in the administration. And whether it’s all a negotiation tactic, an underlying grand master plan or simply a huge gaffe. However you colour it, pre tariffs, we were explicitly told the administration wanted lower US bond yields. The exact opposite is happening. And I’ll begin the new week with a mind for USD short trades. But also ‘momentum trades’ whereby momentum aligns with a specific cause. I’m prepared to dismiss a lack of correlation as long as the momentum aligns with my underlying thoughts of a particular currency.

For things to get ‘back in sync’ I suspect it will take an amicable agreement between the US and China.

In other news, all other news was dismissed. Be it the ECB all but confirming an imminent rate cut, the RBNZ actually cutting rates, US CPI (soft landing in tact) or anything else important was rendered moot as the tariff narrative once again dominated.

On a personal note, it was a week of three trades.
It was very strange to place a ‘risk off’ trade whilst the S&P was going up. But that’s what I mean about having faith in your own underlying narrative and placing a trade regardless of correlations.
I then placed two USD short trades. At the time, I billed them as ‘risk on’ trades. But with hindsight, they were both ‘USD short momentum trades’.

It’s not an ideal environment but I do still think it’s a tradable environment. My preference remains for 1hr swings, but if you prefer a shorter timeframe with the goal of a quicker trade completion time (to avoid the changeable narrative) I would suggest it’s a very viable thesis.

Results:

Trade 1: NZD JPY +1.5

Trade 2: NZD USD +1.2

Trade 3: AUD USD -1

Total = +1.7 %

Total since start of blog = +36.5% (risking 1% per trade).

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79

LIVE TRADE:

AUD CHF long.
Entry: 0.5177

The tariff mood has started the week fairly calmly. If I wasn’t about to go out I would prefer to wait for the US open. But I’m speculatiing the mood will remain calm.

There is a case to say any concoction of ‘risk on’ trade is viable, particularly NZD or GBP long (it still appears the UK are getting away fairly lightly tariff wise, plus NZD has momentum). There is also a case to say USD remains the best short option. Plus, suggestions the BOJ will pause the hiking cycle also puts JPY shorts on the table. But I have an inkling for AUD CHF. For better or worse, I’m going with that.

The risk to the trade is a tariff comment upsets the apple cart. Which, as the US session gets underway, is very possible. But I have to go out and I’ve made the decision to trade through that risk.

It’s a 20 pip stop loss with 25 pip profit target for 1.2:1 risk reward.

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WEDNESDAY 16 APRIL:

Comments that china could be prepared to do a deal with the US ensures sentiment remains tentatively positive but with the feeling that a negative comment could turn the mood sour at any moment. Despite the mild positivity in the air NVIDIA negativity keeps the S&P suppressed.

The USD remains down in the dumps, a quick look at AUD USD shows six ‘up days’ in a row. But the chart is now at major daily resistance. It currently looks like the ‘price’ wants to break through, but with red flag AUD and NZD data due during the Asian session, it’s prudent to stay patient.

Yesterday, it was nice to see actual data affect proceedings (soft ZEW data weakened the EUR and soft CPI weakened the CAD).

Today, soft CPI data dampens appetite for the GBP (despite positive UK retail sales data). A very non committal BOC makes the CAD difficult to trade. Chair powell and the ECB could offer opportunities. But ‘good Friday’, whilst potentially tradable, could dampen the markets appetite to commit before the weekend.

Currently, I’m mildly optimistic that ‘risk on’ or ‘short USD’ trades may be feasible. But I’m prepared to stay patient and pick my moments. Whilst being aware that ‘earnings season’ or ‘tariff back and forth’ could turn sentiment negative at any moment.

Feel free to offer thoughts or ask any questions:

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LIVE TRADE:

Given everything I’ve just said, in a sign how how fragile everything is, the market has turned negative following chair Powell’s speech.

I’ve entered GBP JPY short
Entry,: 188.17

It’s a ‘risk off momentum in the moment news trade’ given the negativity following chair Powell’s comments.

The VIX is on the rise, the S&P is down and I think given the precariousness of the overall situation, we could see some selling into the end of day.

I’ve chosen the GBP due to today’s soft sentiment post CPI data.

The risk to the trade is the negativity is short lived and we get a bounce back, this is a bold trade and I wouldn’t blame anyone for sitting this one out. But I think the momentum is worth a go in the hope of a quick completion.

Given the high ATR it’s a 40 pip stop loss with 60 pip profit target.