Trading Plan – Monday 24th April 2023: Will the USD continue to slide?

Mark NugentApril 2023, Trading Plan

Trading Plan – Monday 24th April 2023: Will the USD continue to slide?

Good morning.

Hi, it’s Mark here. This week’s content will be text-based.

Last Week

Let’s have a look at last week. Risk sentiment was indecisive all week, bar Thursday, when it was moderately risk off.

In the UK, inflation for March beat expectations, coming in at 10.1% versus 9.8%.

Perhaps the most notable event of the week was the European Central Bank (ECB) meeting minutes that noted current inflation is now almost entirely explained by demand factors rather than supply factors. So, it’s not about gas prices, it’s about people buying stuff. Therefore, more hikes to come.

I placed one trade on Monday. EURUSD long. I got taken out at breakeven within a few hours. A brief video of this trade will be available for you on Friday.

This Week

We are in Week 17 and the calendar is sparse. There is inflation from Australia on Wednesday, GDP in the USA on Thursday and the Eurozone on Friday. Also on Friday, we have a rate decision and statement from the Bank of Japan.

Media

Looking at the media, there’s an interesting article from Simon Flint in Bloomberg, entitled Four Reasons Why Investors Expect the U.S. Dollar to Keep Sliding. They are, in a nutshell:

1. The belief that the Fed will ultimately cut rates faster than other jurisdictions,

2. Banking sector stresses will be a US-only issue, forcing the central bank to be more dovish than its peers,

3. A belief that either JPY or Yuan appreciation will give relative USD weakness and,

4. The risk of a more general pivot away from the USD as a primary reserve currency (a lot of institutions see the USD making up less than half of global reserves within a decade).

Current Charts

Looking at the charts as they are now (1015 UK-time), I see no movement in equities, GOLD and oil. The US 10-year yield is down ever so slightly. Looking at currencies, the EUR is strong as per my bias and the USD and JPY are both down, making good potential partners for the EUR in a “strong EUR” trade.

Trading Themes

I discuss my trading themes for the week in the VIP Club member’s area, link below.

I hope you found this note interesting. I’ll be back tomorrow.

VIP Club members can see today’s video, all brief trading videos, the Monthly and YTD Performance videos, the Trading Video Course and download the MTM Indicators software HERE