Daily Alert – Friday 19th February 2021: GBP long was trade of the week

Mark NugentDaily Alert, Feb 2021

Daily Alert – Friday 19th February 2021: GBP long was trade of the week

Without doubt, buying the GBP was trade of the week. Apart from a small hiccup on Wednesday, the GBP was propelled upwards all week, kicked off by PM Johnson announcing over the weekend that everyone in the top four Covid risk categories had now been vaccinated. I took GBPJPY long on Monday morning and closed it on Wednesday for a gain of +3.36% on 1% risk. A two minute video explaining the trade is available for members in the VIP Club area.

Risk sentiment was changeable through Wednesday, with Thursday and today being solidly risk-on. Having said that, global equity indices have barely moved across the week. Oil threatens to close at last Sunday’s open price, as ongoing positive sentiment from vaccine hopes is counteracted by positive noises coming from the US about ending their huff with Iran, which would increase global oil supply. GOLD moves down to support as US 10-year yields rise, making debt more attractive to those who seek no return on their investments.

On the currency markets the JPY has reflected sentiment and as such is down on the week. The AUD and NZD are well up on the week but only due to a significant upwards move today after Westpac increased their end-2021 interest rate forecast for the AUD. The USD index has broken down through recent lows and is now trading at levels not seen since April 2018. The EUR drops over the week, despite its two major counter currencies, the USD and JPY, also being down. That takes some doing.

Have a great weekend. I’ll be back on Monday.

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