We are long AUDCHF.

The fundamental divergence between the hawkish Reserve Bank of Australia and the Swiss National Bank is one of the cleanest setups right now.

1. Australia is dealing with CPI well above the RBA’s target (hawkish)

2. Switzerland is dealing with inflation at the lower bound of the SNB’s target (dovish)

We’ve actually been bullish on AUDCHF for months as this macro divergence has been playing out for quite a bit, and now the recent correction offers an opportunity to position for the next continuation.

Target 0.5950

You know how we operate here, full transparency!

Stopped out quickly on AUDCHF.

No change in the big picture macro context, just equities taking a bit of a hit with volatility rising, and that hurts a carry trade like AUDCHF.

Remember NOT to think this is bullish GOLD, it's not!

We've reloaded on AUDCHF yesterday.

Longer term trade, still same underlying view.

Stop loss moved to breakeven.

Still, "cheap" is NOT a reason to buy GOLD.

There's NO reason to buy it until the underlying issue is resolved.

Without this strategy, you're trading Forex on hard mode.

Because the truth is that the biggest Forex trends almost always start the same way.

It's a boring way, but...

Boring is profitable.

Full strategy explained in a new YouTube video, link:

https://www.youtube.com/watch?v=0V3UE_AgJ24

Once you see it properly, it clicks!

AUDCHF

If you've watched the latest video, you know exactly the strategy behind it.

We took the small profit on AUDCHF after the labor market data from Australia.

As bad as it gets there with the unemployment rate up to a 5 year high!

That puts a dent in the RBA's outlook, no more hikes anytime soon.

The Dollar fell after a hot CPI and everyone’s calling the top.

Ehhh I wouldn’t be so sure about it:

https://www.youtube.com/watch?v=xfs34uK2rxY

Don’t fight the FED!

We are long GBPCHF.

1. Unemployment rate dropped to 4.7% (from 4.9%)
2. Wages (ex bonuses) accelerated to 3.7% (from 3.5%)
3. Services CPI jumped to 3.7% (from 3.4%)

Simply, all hawkish for the Bank of England which will have to hike at their next meeting and keep more hikes on the table as well.

Target 1.12

Still NOT buying GOLD yet.

"Cheap" is NOT a reason to buy!

We'll get long the precious metal ONLY when the context shifts bullish for it.

For now...

Higher energy prices = higher rates = bearish GOLD

The same force that pushed GOLD from 5400 down to 4000 is still there and getting stronger.

As long as the context doesn’t change, we are NOT buying the dip in GOLD yet.

If you prefer to watch the video on YouTube:

https://www.youtube.com/watch?v=bQZD_akXnG0

7 minutes to be on the right side of the context!

Positive surprise here for Europe.

Base case scenario was a downgrade in the rating but they didn't!

For Monday it should mean some relief in the French bonds stress and less safe haven demand for the CHF.

In plain words, will help lift GBPCHF higher too.

Have a great weekend everybody!

GBPCHF, still there.

UK budget to be announced tomorrow.

Once that clears without any surprises, it should start breaking higher.

New lows approaching on GOLD.

Still the same view.

"Cheap" is NOT a reason to buy yet.

The weekend that created the Forex market:

https://www.youtube.com/watch?v=rdg7W5PYsek

A different kind of video today while we wait for the US midterm election on Tuesday, a bit of history knowledge is always useful!

Still holding GBPCHF.

Nothing changed here.

I'm expecting all this chop to resolve to the upside.

Target still 1.12