- Dollar has been the headline since the end of 2016, the FED outlook remains the same for 2 to 3 rate hike for 2017. The economic datas continue to perform well with solid ground, the yield continues to go higher to signal a global economic recovery. The biggest risk was Donald Trump’s negative sentiment and protectionism, and now we have seen his first week of office, one thing for sure is that he is fulfilling the promises he had for his voters. We expect him to continue fulfill the promise or at least try to do so before Congress stops him. Because of that, we expect him to continue to heat up the economy with fiscal policies and tax cut and less regulation. Meanwhile, JPY still suffers from the deflation market and we don’t see BOJ to tapper their easing anytime soon. Same picture applied to EUR as ECB once again affirmed their stance on the QE program regardless of the objections from many stronger european nations. Fundamentally our view is very clear to buy USD and sell JPY CHF and EUR. The risk is really the sentiment as USD still go up and down day to day surrounding by the president policies. Today we have 2 signals in both EUR/USD & USD/JPY which we would like to take with long-term perspective.
- The catalyst is the current sentiment as Dow has climbed up 20K to signal a global confidence toward Donald Trump’s plan. The daily signal all showed up at good level of support to buy and resistance to sell. However, volatility will be our biggest risk so we need to have a long-term perspective in holding these trade and hold them through the volatilities. Understand we enter them because of the fundamental reason so unless that underlying fundamental reasons change or unless we have major Risk Event such as election or inauguration which we don’t, then we have to hold them through the volatilities.
- We’re at good level to short and buy for both EUR/USD and USD/JPY
- Again, the bias is really the fundamental reason but we have to be careful for the sentiment that might stop us out easily.
- I’ll manage it with news updates but most likely to hold it until i reach 1:1 before i tighten my stop loss.
- Yes but only if i get filled by tomorrow.
Next week is a major risk event week with
BOJ rate decision on Monday
FED rate decision on Wednesday
BOE rate decision on Thursday
NFP on Friday
If we enter today, that will still give us enough time to move SL to BE.
But on the other hand, non of the risk events are expected to be a surprise.
BOJ is expected to hold rate
FED is expected to hold rate
BOE is also expect to hold rate
NFP is expected to be positive
So the risk event can either help us or hurt us which is beyond our control.
Take the trades in accordance with your own risk then.
SL @ 1.0848
LONG USD/JPY (remember we already have a NZD/JPY trade so now our JPY position is more than 1%)
SL @ 112.26
updated on Sunday Jan 30th
- The market reacted last Friday to fill us in with another solid candlestick but the size was quiet small to signal a continuation of uncertainty for USD.
- We think USD will be volatile for this week as Donald Trump still has plans to unfold and riots are still ongoing, meanwhile, FED is going to release a new FOMC this week to give us more insight.
- I’m still in this trade a a long-term perspective for USD but as mentioned, I do expect some volatility within the current range of 112.50 - 115
updated on Tuesday Jan 31st
- We got stopped out in this trade today due to large volatility form Donald Trumps comments in regards to Currency War. As mentioned, this kind of sudden catalyst is unpredictable and that’s why always have a good SL and always know that every trade no matter how confident you were at the time of entry, there is always uncontrollable uncertainty ahead of it.