It is quite a game trying to keep up with the market focal points and make sense of the news released.

The ECB forum in Portugal has cemented the views expressed last week but the three central banks, US ECB and the BOJ. The US is still seeing the justification and the need for rate hikes although there was some concern over the trade issues. The USD has had an interesting day defending what is known as the 95 handle. It is an important area seen here on the daily perspective complete with the battle zone! It is pushing up with resistance close:

 

I am keeping an eye on the yields which have given little in clues today but any weakness will be traded as an opportunity to short the USD and USDJPY is my favourite and has been for a while.

 

 

The Other angle to emerge was Kuroda admitting not only is he dovish but worried as well about indirect effects of trade wars.

There were some hints from Trump about new trade agreements, but we can never be sure of the verity of tweets, especially in the arena of politics.

Attention will now turn to OPEC and the discussion about supply. Saudi Arabia wants to start pumping more as do Russia. Any holding back now by OPEC could send oil higher and that too has implications for oil importers oil exporters and inflation generally.

The Gold market has been under pressure again and not behaving in its safe haven mode but rather the reflection of USD moves. I am keeping a close eye on this for any turn towards risk-off that can fire this to the upside.

Equities have retraced some of their risk off losses from yesterday. The Nikkei had an unsure day but still looks more bearish than bullish.

The DOW is still moving down

The FTSE reacted from the Brexit vote which came out in the government’s favour much to the relief of the UK prime minister. The chart is below.

The balance is still tipped toward risk-off as equities are still not secure and let us not forget that they are overvalued and that trade wars are not their only concern Monetary tightening takes liquidity out of the market and that puts more pressure on.

The Watchlist

FTSE

I am still in this trade and I am prepared to add to it at resistance. I have not moved the stop but will bring it down slightly above break-even to lower the risk if I take another bite

Gold

I am only considering longs and I will wait for confirmation of both behaviour as a safe haven, risk environment and the appropriate structure.  It will be worth waiting for with excellent risk-reward

.

USDJPY

This is approaching a resistance area and a down trendline but i prefer to be conservative with this. I need a close below 109.40 to be interested to short. This one too is worth the wait.

EURAUD

I had this on the list on Monda and still like the long on a pullback

EURGBP

A good range, and I do prefer the short. it has got over political and not a favourite right now.

AUDJPY

A break lower through support and again the risk environment turning more negative would be the catalyst for this one. Watch 83.60 this is the weekly level.

I intend to keep my focus tight and my list narrow. I have one live open position and I am more biased towards shorting equities and taking advantage of any risk-off conditions than trading the USD.

The time for that may not be right…the rejection of that 85 level needs fundamental support and follow through. It is not a place to Long and the shorts are not yet setting-up.

There is a big interconnected game going on on the geopolitical and the economic level with an under-current of trade threats and currency wars. The trick will be to call the moments when the opportunities arise and know exactly why they are important. There are some bigger longer-term trade biases forming as we decipher the rhetoric from all quarters.

When we play these games we must remember our rules. Tight risk management and the best risk-reward structure you can find. Do not trade without a conviction and a reason for doing so.

 

Judith Waker