Watching carefully the FOMC this week for further guidance on the tapering subject hence the USDJPY trade.

No mention of the word “tapering” and USDJPY takes a trip back below 109.000, any mention of the tapering subject, with hints that it’s a matter that will be discussed actively going forward and USDJPY continues towards the 111.000 target

Also beware of the “experts” out there, regardless of this week’s FOMC result, the tapering subject will gain attention in the coming months, remember to shut noise from the average trading “guru”, trade facts

The recent FOMC sends a clear confirmation that tapering is coming later in the year, also rate hikes expectations have been brought forward, it’s the early signs of a powerful hawkish shift from the FED.

USDJPY slowly running to the 111.000 target, but I would say, expect this to run much higher over the course of the year towards 116.000, we will be trading it accordingly

S&P500 target 4300…

Not the boldest of trades but we expect the S&P500 to reach 4300 before the end of August, plenty of FED hawkishness has been already priced in for the time being, so until the next catalyst some rebalancing will push the S&P500 to new ATH, beware tho there could be some volatility and a bit of more downside before the dip gets bought for good

USDJPY 111.000 target reached…

Took longer than expected but here it is, as mentioned last week, because of the upcoming macro environment (FED tightening) we expect USDJPY to extend towards 116.000 before year end, we will trade it accordingly

S&P500 4300 target reached…

Don’t fight the macro environment and remember to not get stuck in front of the charts too much, if trading is exhausting you, you’re doing something wrong.

Trade less, trade smart

EURUSD squeeze targeting 1.19400…

Last week’s flows after US data mark a turn in sentiment that suggests a short term squeeze higher on EURUSD, expecting 1.19400 to trade in about a week or so

Quickly proven wrong on EURUSD on the break of 1.18000, a friendly reminder from the market that not all trades can be winners

Plenty of questions recently asking our thoughts on inflation going forward, and the answer is quite straightforward, there are two players that say “inflation is transitory” which are smarter than all your favorite trading gurus combined, one is the FED and the other the bond market, never a good idea to fight them.

We are likely near peak inflation for the year, and if you are wondering what it means for the market, well, think of last year’s macro trends in FX (reflation driven) and reverse them.

EURGBP targeting 0.87500…

Expecting bouts of risk off and volatility spikes in global markets over the next couple of weeks as inflation expectations move lower (see post above) and global growth peaks, EUR (low beta) tends to outperform GBP (high beta) in this type of environment, hence targeting a move higher towards 0.87500, remember to buy low and not high

EURGBP is valid as long as we don’t get a clean break below 0.85000, we are seeing early signs of risk off building up in Asian markets but none in global markets yet

EURGBP still ongoing, expecting the BoE meeting this week to cool down hawkish expectations and strike a cautious tone, also notice the “risk off” brewing and spreading across assets, we expect more of it in the upcoming weeks, with stronger momentum, anyway, EURGBP is valid as long as we don’t get a sustained break below 0.85000

EURGBP temporarily invalidated with the break of 0.85000, we still expect a move higher but the timing is clearly off, removing the ego on these occasions is essential, don’t let yourself be frustrated by the market.

Side note, the NFP just confirmed the FED tapering timeline, Powell will make his hawkish shift at the Jackson Hole this month to hint at the start of the tapering operations, know this and you know how to be positioned for the whole month

To follow up on the tapering subject, we expect USDJPY to get comfortably above 112.000…

Base case is that the Jackson Hole will signal a shift in FED’s rhetoric, or better, Powell’s rhetoric, enough for us to expect USDJPY at 112.000, tho don’t expect the market to move in a straight line

USDJPY ongoing, It’s Jackson Hole week, pay careful attention to Powell’s words, it’s all a matter of him giving further guidance on the tapering timeline and we (and the market) will be carefully listening for subtle hints on when tapering will start, a slight nod at tapering before year end from Powell and USDJPY goes to 112.000

USDJPY taking its time, sideways action so far but Powell sent the right clues last week at the Jackson Hole and our base case is that tapering will start in November, which means we expect USDJPY to continue to move towards 112.000 going forward, we continue to trade it accordingly

USDJPY still ongoing, so far sideways action but still on track for a move to 112.000, notice also how the POC has shifted higher in the range, decent clue of what’s going

While USDJPY chops around we also have our eyes on the S&P500 where we expect 4700 before year end…

As many start shouting how the FED tapering will trigger a stock market crash, we take the other side, targeting 4700, the matter is simple, when tapering is well communicated and well anticipated (as the FED is doing) it actually ends up improving confidence in US markets, volatility will probably rise yes, there will be noticeable dips here and there yes, but buying those dips will remain a valid strategy for the upcoming months even with the FED tapering.

With this said, we expect 4700 to be reached before year end, just beware of the noise, there will be plenty as the FED tapering approaches

A lot of noise around on the China real estate matter, here’s the ONE thing you need to know…

Besides short term emotional moves which we have been seeing yesterday (and that may continue for a couple more days) the matter shouldn’t be a catalyst for a large correction as many are yelling about, the Chinese gov will (should) take the matter in their hands and when the CCP gets involved to control the situation that’s when medium to longer term dip buyers will show up in US markets too.

4700 is our expected S&P500 year end target and risk reward just got better, just a matter of timing entries right and keeping some breathing room to suit the volatility, again, beware of the noise, keep it smart and make sure you have the right minds around you, and again, markets will get volatile

Just a matter of patience, tapering confirmed for November after the latest FOMC, now also rate hikes on the table for next year, USDJPY of course going for that 112.000

USDJPY 112.000 target hit…

Took its time but finally delivered, remember, patience and discipline bring you a long way, surround yourself with the right minds and keep it smart