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

Noise isn't news

While my open positions are going well, I have no ideas for any further trades. As usual, lots of noise coming from Trump, but nothing substantial and hence nothing tradable, in my opinion. Don't trade hot air, i.e. ignore what Trump is saying, focus on what his administration is actually implementing.

I'm looking for EURUSD to hit 1.06 today. Ideally, we'll see a re-test of 1.0524 soon.

EURUSD Daily 10/20/2017Open positions as of 10/02/2017 08:54am CET:
EURTRY short from 4.0524, unrealized return: +3.83%
EURUSD short from 1.0795, unrealized return: +1.39%

Realized YTD return: +0.7% from 2 trades
Total YTD return: +5.92% from 4 trades

European elections: Anxiety now!

Only a few days ago nobody was looking at Europe, despite the many challenges faced by the euro area this year. All eyes were on Trump, the US dollar fell after negligible comments made by the president and his staff of economic advisers. What a difference a weekend makes! It's Tuesday, the EUR is weakening for a second day in a row and miraculously the whole narrative by market watchers has changed. Analysts are highlighting the risk from European election outcomes that might endanger the euro zone, possibly even the European Union. It is as if market commentators woke up and, in unison, had the same thought: Anxiety now! The switch has been flicked, USD risk-off has been turned into EUR risk-off. It's a new week, so let's have a new story to tell. To be frank, I'm fed up with researchers and self-proclaimed journalists (who are doing a lot of things these days, but definitely not serious journalism) wanting to explain to me why an asset has moved in a certain direction after the fact. Instead, they should be separating the important news from all the noise (mostly coming from Trump these days), study the evidence revealed by their research and then make appropriate deductions about the state of the market as well as implications this might have for the future. Too often analysts change their opinion even after minuscule changes in asset prices, instead of showing any sign of confidence in their own research. How can this type of market analysis be taken seriously? Don't even get me started on journalism... The Economist aside, there's little I can read nowadays without having a total freak-out. Anyway, let's not digress: I'm standing firmly by my EUR short / USD long call.

EURUSD Daily 07/02/2017Open positions as of 07/02/2017 08:56am CET:
EURTRY short from 4.0524, unrealized return: +2.75%
EURUSD short from 1.0795, unrealized return: +1.05%

Realized YTD return: +0.7% from 2 trades
Total YTD return: +4.5% from 4 trades