Dollar: The dollar continued its slow decline yesterday, with GBP as an exception. A weak ADP report added to year-end extension expectations, though market reliance on weekly data is inconsistent. Claims data today could hold more weight if there’s a negative surprise.
EURSEK: EURSEK remains steady, trading near key support (10.88/10.90). A softer CPI print offers some relief. Prefer a bigger bounce to position for Q1 moves; layering offers closer to 11.00 if seen.
USDJPY: Buying dips in USDJPY still makes sense, even with a likely December BoJ hike. The hike seems priced in, and unless messaging is hawkish, there’s limited reason to buy yen now. Long USDJPY, with risk at 153.00/30.
EURPLN: Still holding short EURPLN after a favorable move yesterday.
GBP: GBP surged, breaking key levels (EURGBP below 0.8750, cable above 1.3269/1.33255). GBP is the most bought currency in the HF sector. Watching LFS, CPI, PMI, and MPC data mid-month. Looking to sell cable near 1.35 and buy EURGBP near 0.86.
EUR: Euro inches higher into resistance, with targets at 1.1725 and 1.1760-80. Positive signals from European banks and bund yields support bullish sentiment, but pace is slow. Holding firm, stops raised to 1.1590.
CHF: Limited reaction to CPI. Market sees low probability of SNB rate cuts. USDCHF held 0.7990/00 support. Awaiting a dip to buy EURCHF.
AUD: AUD outperformed on strong household spending data, trading above 0.66. Positioning is less restrictive, but resistance near 0.6700 persists. Holding reduced longs, looking to re-buy dips near 0.6580/0.6530.
CAD: CAD weakened as DXY dropped below 99.00. RM accounts showed demand for CAD, but it remains a preferred funding currency for EM high yielders. Awaiting Canadian labor data to add to CAD shorts.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!