Really good result in 5 months. Thank you for your interesting posts. I’m surprised not to see more discussion and comment here.
I wish you good luck and am watching now. 
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Wednesday 2 July:
The general market mood remains positive, and particularly sentiment for the USD remains in the douldrums. All of a sudden, there is talk of three FED cuts by the end of the year (although I think that’s a bit ambitious). A soft NFP report could cement multi year USD weakness. But pre (Thursday’s) NFP I suspect we could see some dollar profit taking.
Currently, I see ‘risk on’ short JPY (or CHF) as very viable, the risk to a trade would be USD liquidity if the dollar continues to weaken.
LIVE TRADE:
NZD JPY long
87.27
20 pip stop, 30 pip profit.
As discussed this morning, I feel the environment supports a ‘risk on’ trade. Today’s US data hasn’t altered my view.
I’m leaving the USD alone due to being wary of pre NFP profit taking.
Its a 20 pip stop loss with 30 pip profit target. The risk to the trade is negative sentiment or USD liquidity if dollar weakness returns.
I will close the trade before NFP if it’s ongoing.
*Arguably the GBP has been a ‘catalyst short’ opportunity today. But I feel like I’m late to the party on that one .
Please feel free to offer thoughts or questions:
Trade closed manually:
I have closed yesterday’s NZD JPY trade for a small profit of +0.6. (to avoid NFP risk).
With an early close today due to independence day tomorrow, it’s debatable whether there will be a post NFP opportunity.
I do think there is a case to say a pre event USD short ‘anticipation’ trade is a viable option. Something like an AUD or EUR USD - buy stop order a few minutes before the release. The reasoning being that the consensus is for a below forecast number, which would compound USD weakness.
The risk being NFP is particularly volatile and any triggered trade could whipsaw as the market digests the numbers.
Personally, it’s not a trade I’ll be attempting, I’m just saying I think it’s a reasonable idea.
Wishing you a lovely weekend, today I’ll be designated photographer as Michelle graduates her PGCE.
Weekly Review to follow, please feel free to offer thoughts or questions:
Weekly Review:
The week starting Monday 30 June began with the USD on the back foot in a continuation of the previous week’s narrative. With the market anticipating at least two cuts from the FED before year end.
Alongside USD weakness, the overall market mood remained positive, the S&P hovers near all time highs and the VIX remains well below 20 as Middle East concerns ebbed and tariff concerns are put to one side (how long for?).
The ‘risk on / weak dollar’ narrative remained throughout the week, at least until Fridays ‘upside surprise’ NFP data. Which is a reminder to expect the unexpected, many analysts predicted a below forecast number, especially given Wednesday’s ‘soft’ ADP data. But a much stronger than forecast headline number gave the USD a boost. And hit the JPY particularly hard as we got an old fashioned stocks up / yields up = risk on day.
I’m doubtful NFP will be a game changer for the USD though. And I begin the new week with my ‘risk on’ bias intact, comparing the USD and JPY against each other to determine which currency is the best short option. Not ruling out the CHF as a potential short, but the Swiss franc is still having bouts of strength at odds with the overall positive tone.
The potential spanner in the works this coming week will be the tariff narrative. The 90 day reprieve ends on July 9 and we could get some fireworks.
It seems the market is ‘hoping’ for a blanket 10% across the board. I suspect the best we can hope for this week is a ‘kicking of the can down the road’. The worst case scenario would be a resumption of the chaos we saw in April.
In other news, the GBP came under pressure as the government’s fiscal policies are scurtinised. I suspect that the UK’s relatively high interest rate and the overall ‘risk on’ market mood, stopped the pound from depreciating further. But it could be a bumpy road ahead for the GBP.
On a personal note. It was a week of ‘only’ one trade. But that was due to my busy schedule rather than a lack of opportunities. I missed Monday’s USD weakness, the potential GBP short catalyst and Thursdays post NFP ‘risk on’ catalyst.
I did manage an AUD JPY long ‘risk on’ trade on Wednesday. Which I ultimately closed pre NFP for small profit.
Not ideal, I’d much rather get back to an average of three trades per week. But nonetheless, after a disappointing June, it was nice to get back to winning ways of sorts.
All eyes on the tariff narrative as we move into the new week.
LIVE TRADE:
AUD JPY long
84.72
20 pip stop loss, 25 pip profit target.
The AUD started the week under pressure as the US president singled out the BRICS nations tariffs. (The AUD falling in sympathy with china).
It has since been telegraphed that in general, tariff negotiations are going well, the market is expecting good news. And any ‘risk off’ moves are reversing.
Arguably, any currency could be traded Vs the JPY as a ‘risk on’ trade. I’ve chosen the AUD as it currently has short term momentum Vs the other currencies.
It’s a 20 pip stop loss with 25 pip profit target 1.2: 1 risk reward.
The risk to the trade is negative sentiment (probably caused by negative tariff news). Or the fact there isn’t a swing to speak of the hide the stop loss behind.
If the trade is still ongoing, I will closed the it before the RBA interest rate meeting to avoid holding risk during the event.
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RBA statement tomorrow, any moves?
With the RBA being one of the more hawkish central banks (preference for higher interest rates) and inflation in Australia still relatively high. I imagine either a ‘hawkish cut’ (a rate cut but signaling no more cuts for a while).
Or, no cut at all (hold). I imagine either outcome would be AUD supportive. But it’s not something I will try to anticipate, rather, react after the news.
Possibly with another AUD JPY long (depending on the tariff news and risk environment at the time).
Thank you for sharing. I’m of the same view but might opt for AUDCHF buy instead. CHF has been overbought in my opinion.
That said, I’m not in any position right now as I think the entry point matters.
Nice hit.
You’re right, CHF would be a good option too (assuming all goes to plan).
Personally, I’ll be comparing the CHF Vs JPY chart and I’ll short whichever one looks weakest at the time.
If course, nothing could go to plan and the RBA could deliver a ‘dovish cut’, or the risk environment might be negative if tariff headlines are negative. In which case I’ll reassess.
Best wishes 
CHFJPY is up 90 pips today. If risk-off, we should see CHF unwind harder than JPY in my opinion.
But of course, that’s assuming our bias is correct.
Good luck for RBA, if you’re trading it.
RBA in focus:
It’s a week bereft of major US data. In the main it’ll be up to the ‘risk environment’ to determine proceedings (which currently means tariff headlines).
But we do have the RBA and RBNZ rate decisions to potentially create opportunities.
First up, during Tuesday’s Asian session is the RBA, a central bank with a preference for high interest rates (hawkish).
*Reminder: (risk environment aside) high interest rates ‘generally’ equals strong currency.
Analyst concencious is for a 0.25bp cut.
I can envision two scenarios:
A rate cut with ‘hawkish narrative’ (non or limited cuts on the horizon).
No rate cut (hold), with data dependent forward guidance.
Both scenarios ‘should’ be AUD positive. Possibly creating another AUD JPY long trade.
Of course, especially after Friday’s NFP, we know that anything can happen and the RBA could deliver a ‘dovish cut’. But considering inflation is still relatively high in Australia, I would be surprised with that outcome.
And, of course, a lot depends on the overall ‘risk environment’. We could very well have 200% tariffs across the board in 12 hours time. And I would only long the AUD in a ‘positive risk environment’.
*Side note: With the S&P ‘near all time highs’, it’s only natural that it could pull back a little. So, I’m more focused on the actual narrative at the moment rather than correlations.
**Second side note: I’m slowly starting to revisit the ’ buy / sell stop anticipation trade’. And arguably, an ‘AUD long’ pre-rate decision is viable. (Whereby you place an ‘AUD long’ stop order pre event, if it’s a dovish outcome the order doesn’t trigger). It’s not something I endorse in a ‘live account’ but it’s a strategy worth considering. Particularly as I suspect ‘red flag’ US releases could become important moving forward.
Ultimately, no matter the type of trade you take, it’s very important to remember that 50% will hit profit and 50% will stop out. That’s why we use a higher risk/ reward per trade.
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Huge W if you did this. Cheers and possibly congrats.
I myself did not as I did not like the high prices.