- Fundamentally USD has been a very strong currency to buy, continuos of strong job datas, GDP and inflations all contribute the possibility and almost certainty for FED to raise interest rate in 2017. However, the current sentiment is what has been pressuring USD from Donald Trump’s comments and executive orders, FED dovish talk, global risk off sentiment etc. We want to buy USD because we believe eventually the market will revert back to the fundamental picture. Today we have a nice Bullish signal in a nice zone in both USD/CHF & USD/JPY and we think with enough SL to let the possible sentiment noises filter, these 2 pairs will eventually look to go upside. On top of that, we also have positive sentiment from Chinese Trade Balance, strong oil market to signal a more steady global risk on sentiment for 2017.
- The catalyst was the Chinese Trade Balance, The U.S court ruling and the phone call between Trump and Xi. US had been sold off previously on Trump’s actions and comments, and now it’s at a much better area to buy.
- USD/JPY found support above 111.25 and should test 115 again even if it wants to go down, but these is a good area to buy as we’re still above 200EMA. USD/CHF is even better, right above 200EMA with very good area to the upside.
- The risk is really the short-term sentiment from U.S particularly Donald Trump and his executive orders, my bias is that the worsts have come by already, from his recent behaviour to the Court system in U.S, the fundamental strength is just very strong to support USD so when it’s at this zone, it will be more attractive to buy.
- I’ll manage it with the fundamental datas and tend to ignore the sentimental drives as I know any negative sentiments can happen and will sink the trade, but i’m holding it for the fundamental strength and think eventually it will turn upside.
- I’m using a larger stop loss to withhold any possible sentimental noises.
SL @ 110.85
P @ 116.05
SL @ 110.85
P @ 116.45
SL @ 0.9840
P @ 1.0218
SL @ 0.9840
P @ 1.0218
****updated after the Press conference of Trump and Abe****
as expected, there weren’t too much updates and the general tone was quiet friendly.
According to the geopolitical location of Japan and U.S, the past history since world war 2, and the current necessity for U.S alliance in the Pacific ocean, i really doubt there will any disagreements that are large enough to tera up the relationship.
On the contrary, I think the weekend meeting will most likely be a gateway and show-off for U.S.
****updated Feb 14th 2am****
The USD continued to regain strength from the softer tone of Donald Trump and the sentiment has turned slightly to the upside. However, tomorrow we will have Yellen speech which can change the direction of USD to either ways.
Because we’ve entered these 2 pairs due to the fundamental strength of USD and as long as that reason still exists, we will continue to hold these 2 trades.
NY Fed today also raised the forecast for inflation which continued to signal a strong USD environment fundamentally speaking.
****updated Feb 14th 7pm****
Today Yellen’s speech in front of Congress has pushed USD higher across the board, in particular with safe heaven currencies.
The risk sentiment is also on and the outlook for economy is in an inflationary mode with possibility for March hike is very much alive again.
We’re also on consecutive 4th green days and also near resistance of 1.0100 in USD/CHF & 115 in USD/JPY.
We’re expecting some pullback but the fundamental bias is still large and we’re intending to hold this USD trade unless the we have some structurally fundamental changes.
****updated Feb 20th 3am****
our Dollar trades continue to react to the negative sentiment with the strong fundamental to support them. We cannot really know how the sentiment is going to be in the near future, but as long as the fundamental strength is still here, we will hold these trades for now.
****updated Feb 20th 9pm****
We actually had a large green candle after the 2 days of drop previously, and now it looks like USD/CHF is on its way to the upside again.
Fundamentally the bias is still very strong toward USD than CHF and we’re holding this trade.
As for USD/JPY, it’s in the same picture as USD/CHF and is looking to test 115 again.
****updated Feb 22nd 1am****
we’re now moving to the sideway movement but our fundamental bias is still very strong. It’s a matter of time for USD/JPY to keep it’s uptrend and yes we might be wrong in our timing but we’re certainly right in our direction. Therefore, i’m holding this trade now.
Same thing applies to USD/CHF as the fundamental bias is very strong toward USD.
****updated Feb 23rd 7pm****
USD/CHF is having a nice uptrend now while USD/JPY is still very choppy. Japanese Yen had been bought largely recently due to safe heaven inflow from European political unstableness and U.S policy uncertainty.
USD is still very strong fundamentally but the sentimental negativity can be long and large.
We still think USD/JPY will be well supported but most likely it might goes into sideway movement for sometime.
****updated Feb 24th 5pm***
USD/JPY continued to edge lower and test strong support 112 which we will see if 112 can hold or not.
JPY had been largely bought off due to the sentiment and as we have no control over that, we will wait for it to pass and be fine with the outcome.
USD/CHF on the other hand performed much better due to the CHF weakness, it gave us another higher high movement with strong bullish kangaroo tail looking to the upside.
We’re tempting to add on position with this current candle on Sunday opens if the candle can still be a Bullish Kangaroo Tail.
LONG @ 1.0091
sl @ 0.9941
p @ 1.0241
****and move 1st entry to BE @
The fundamental bias is still very strong in USD and as mentioned CHF will have less buying interest for safe heaven inflow because it is right within the Eurozone and that’s where the negative sentiment comes from right now.
USD/JPY is arpproaching 112 handle and as mentioned, the lower it goes the more attractive it becomes.
If we have another reversal signal at 112 area, then we will enter again but with SL below 200 EMA at 110.
****Feb 28th 9pm****
Today we had another Kangaroo Tail signal with the same fundamental bias, therefore this is a valid trade to enter but then again, depend on your own risk management.
I like the candlestick pattern and also the position of the trade as we seem to have another double bottom now.
The risk for any USD trade and JPY trade of course is the large swing of political unstableness but as a fundamental trader, i think the USD is still way stronger than JPY and at this nice level now, i’m confident enough to keep dip buying.
As for USD/CHF, our second entry got filled but then our first entry got stopped out at BE.
The reason we’re more confident in USD/JPY than USD/CHF is simply that USD/JPY is in a much better level for buying at support where USD/CHF is in the mid range and near some near term resistance now.
As mentioned, we’re always more confident to buy at support then at breakout.
****March 2nd 7pm****
Both USD/CHF & USD/JPY is working well now due to the sudden strength into USD due to Fed members’ comments and Donald Trump’s Speech.
We previously had enter 2 more positions into USD/JPY and we have now adjusted our position to 1% in USD/JPY and USD/CHF.
We took some profits off and now will hold both trades until the meeting of Fed, which we will either profit prior to the meeting or get out right at the meeting result.
The Fed meeting is on March 15th.
The NFP might be another event where we can exit, n next Friday.