Trading Plan – Monday 1st June 2020: Coherent currency moves continue to offer opportunity

Mark Nugent June 2020, Trading Plan

Trading Plan – Monday 1st June 2020: Coherent currency moves continue to offer opportunity

Last Week

Events and Calendar
The US-China spat continued. China’s National People’s Congress passed Honk Kong national security legislation against backdrop of global protest. US considering response.
Both sides in Brexit free trade agreement discussions said it is going badly.
Horrible economic data at multiple points during the week.

Risk Sentiment
Moderately risk-on until Wednesday whereupon sentiment was largely indecisive for the rest of the week.

Asset Classes
US equity indices decisively broke through resistance to the upside, with the Nasdaq almost back at February (pre-Covid) levels. Japan225 had a stellar week, boosted by the early sentiment and the weak JPY.
Oil made a small gain, completing its fifth week of recovery.
GOLD maintained its hold on its 8-year high.
Currencies were largely well behaved. The USD and JPY were solidly down (and hence EUR up) on risk sentiment. Commodity currencies were solidly up on the same sentiment. The GBP went sideways.

Trades
It was a good week for trading. I closed T33 (Japan225 long) on Friday for a gain of 5.7% and T34 (AUDJPY long) on Wednesday for a gain of +1.7%.

This Week
There’s a lot going on: Riots in the US; spacemen in space; China shenanigans in Hong Kong; failing Brexit free-trade deal talks. Oh and coronavirus. Having said all that, currencies are repeating last week’s behaviour – US and JPY up and commodity currencies down. Equities, GOLD and oil have yet to get out of bed. We are moderately risk-on as of 1230 BST.

Have a great week.

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