Forex weekly review: fundamental analysis I found myself feeling a little fed up during the week starting Monday 13 October, unable to form a strong confidence in the near term direction of the currencies. I felt lack a lack of US data is really starting to bite, central bank speakers didn't really tell us anything new, Mr trump's brokerage of peace in the middle east didn't create any 'risk on oomph'. All we were left with was snippets of headline news regarding China's reaction to 'tariff escalation', none of which I felt comfortable trading in either direction.
But, far be it for me to complain about a US government shutdown making my trading decisions more difficult. There are actual people wondering when their next day of work will be and if they will even have a job to go back to.
On a positive note, we did get a couple of catalysts moving the currencies, 'soft' employment data from the UK and Australia created momentum for potential short term trades, I say short term because the data was against the tide of 'hawkish interest rate rhetoric' from both countries.
Earnings season kicked of fairly positively, it may well be that the tech company earnings over the next couple of weeks will create our best opportunities in the absence of US data, but hopefully the shutdown will end before it comes to that.
I have read US CPI data will be reported at some point despite the shutdown, I'm unsure how relevant it will be considering it'll be old news.
The previous week's JPY euphoria (negative JPY) was unwound due to new LDP leader TAKACHI attempting to sound hawkish. Which leaves us with a cloud surrounding our two staple currencies, the USD (no data) and JPY (rate hike uncertainty).
Finally, the week ended with a bit of back and forth, concerns over the US banking sector created risk off sentiment, seeing the VIX rise to 28. But Mr Trump tempered the negativity with positive china comments.
I begin the new week without a clear bias, prepared to trade momentum with a catalyst in either direction.
On a personal note, it was a week of two AUD JPY trades, both stopped out. I stand by my AUD JPY long 'risk on' trade, especially as the stop loss was behind 1hr support. But I accept that Friday's AUD JPY short trade was a mistake, perhaps an attempt to pre-empted the market out of frustration, I tried to predict a risk off end to the week. A mistake, especially considering Mr Trump's positive china comments. And a reminder to myself to trade clear momentum with a catalyst. With that in mind, the time to trade to bank induced negativity would have been during Friday's Asian session.
Let's see what the new week brings.
