Staying USD long

Donald Trump's first address to Congress turned out to be uneventful. His "America first" motto shone through, but he managed not to say anything negative or too dopey. Everybody is still waiting for him to present details on how he is planning to implement the promised tax cuts or provide stimulus to the US economy. I stick with my credo that listening to Trump is a bad strategy; I prefer to watch out for actual implementations of what he promised. I've said this before: Ignore Trump noise. As such I also maintain my EURUSD short position as the overriding narrative of Fed rate hikes combined with economic stimulus and European election risk is still active. Support levels 1.0524, 1.0454 and 1.0341.

EURUSD Monthly 01/03/2017USDCAD looks constructive for a long trade targeting 1.3575. Technical analysis, continued USD strength & Canada NAFTA risk supportive. On my watch list.

USDCADOpen positions as of 01/03/2017 8:50am CET:
EURUSD short from 1.0795, unrealized return: +2.56%

Realized YTD return: +4.34% from 3 trades
Total YTD return: +6.9% from 4 trades

Jimmie Vaughan: (Everybody's Got) Sweet Soul Vibe

It's Sunday, and Sunday is blues day! This week with (Everybody's Got) Sweet Soul Vibe by Jimmie Vaughan off his 1994 album Strange Pleasure. Most blues songs I've posted so far have been a bit gloomy, so today's pick is a tad more uplifting for a change. Jimmie Vaughan was born in Dallas County, Texas in 1951. Based in Austin, Vaughan plays Texas blues, which is usually characterised as more jazzy and swingy than other blues styles, such as the Delta blues and Chicago blues. He formed The Fabulous Thunderbirds in the mid-1970s and stayed with them until 1989, when he left the band to play with his younger brother, blues rock guitar legend Stevie Ray Vaughan. Tragically, Stevie Ray died in a helicopter crash in 1990. Strange Pleasure was Jimmie's first solo release. It also features the acoustic song "Six Strings Down" about the death of his brother.

Getting my mojo working again

Just returned from a brief vacation and getting back into the markets -- I'm getting my mojo working again, so to speak. Not much has changed since my last post a week ago, so this quick review of my EURUSD position must suffice for the time being. Still feeling comfortable with this trade. The pair hit the 50% Fibonacci retracement around 1.08 in early February and has been in a solid downtrend since then. Next stops -- ideally -- 1.0454 and 1.0341.

EURUSD Daily 22/02/2017Open positions as of 22/02/2017 8:39am CET:
EURUSD short from 1.0795, unrealized return: +2.78%

Realized YTD return: +4.34% from 3 trades
Total YTD return: +7.12% from 4 trades

Fed on track to hike: USD long

Expectedly, Yellen didn't provide anything enlightening yesterday. The market realized the Fed is still on track to hike rates this year, with March being a "live" meeting (although the hike probability is not high by any means for that meeting). Perhaps traders are still remembering 2016 when the Fed didn't hike as often as had been expected. Traders should forget all about 2016! The Fed entered its rate hike cycle, and it will hike again. Traders should also pay less attention to Trump statements. Let's wait for actual implementations of his promises instead. Regarding his USD rhetoric, it's meaningless. If his administration will deliver on his stimulus promises, which I think it will, that will be inflationary and ultimately positive for the US economy, i.e. it will give Yellen & Co. even more reason to continue hiking rates. It will also be important for the Fed to prove it is an independent institution; the US president has no business pressuring his nation's central bank. Everything is playing into the USD long story at the moment. Don't let Trump noise fool you into thinking anything else.

EURUSD Short 15/02/2017

Quick look at NZDJPY: After I chickened out of putting on a NZDJPY long trade post-RBNZ, the pair is looking constructive again. Trendline support still valid. On hold but definitely interesting.

NZDJPY Daily 15/02/2017Open positions as of 15/02/2017 10:19am CET:
EURUSD short from 1.0795, unrealized return: +2.37%

Realized YTD return: +4.34% from 3 trades
Total YTD return: +6.71% from 4 trades

Expect nothing new from Yellen today

Fed chair Janet Yellen will deliver her semi-annual congressional testimony before the Senate Banking Panel today. I expect nothing new from her today. It's too soon since the latest Fed meeting on 1 February to change course, and the dollar is too strong to hint at a March rate hike, in my opinion. I maintain my EURUSD short position. By the way, US National Security Adviser Michael Flynn's resignation is a non-event for FX, ignore it.

DXY Index 14/02/2017Open positions as of 14/02/2017 08:45am CET:
EURUSD short from 1.0795, unrealized return: +1.77%

Realized YTD return: +4.34% from 3 trades
Total YTD return: +6.11% from 4 trades