Trade ideas thread - European session 12 February 2019

Author: Justin Low | Category: News

Daily thread to exchange ideas and to share your thoughts

Good day, everyone! Hope you're all doing well as we get things going here in the session. It's a bit of a quiet one so far with the lack of developments seen in Brexit and US-China trade talks as we await for things to heat up later in the week (around Thursday). The bare economic calendar isn't going to help move things along so trading will center around the ebb and flow today.

WCRS 11-02
The dollar is mixed on the session as it holds on to gains overnight but is not ramping up further pressure on other major currencies so far today. The Chinese yuan is holding firm against the greenback so perhaps that is leading to some indecisive tones as we begin the morning in Europe.

Meanwhile, risk sentiment remains slightly buoyant and that is helping to see the aussie and loonie pull off some gains on the day. The aussie was also helped by slightly improved business conditions survey earlier today while the loonie is aided by some steadiness in oil prices in trading thus far.

The yen is the laggard as it continues to see further pressure with USD/JPY above 110.00 and investors looking to be more optimistic about US-China trade talks in Beijing this week.

Looking ahead, a structural short position on the euro continues to look more attractive with EUR/USD still in a downwards trend and markets will start to look towards the March ECB meeting in a more dovish light. Economic data over the next few weeks are expected to show more sluggishness and comments such as these from ECB members will serve to highlight the downside risks to the euro ahead of the central bank meeting; markets will factor in odds of a change to the rate guidance in that lieu.

Meanwhile, intraday position in risk trades remain the way to go and for contrarian positions, I'll only be looking to engage in a small short in USD/JPY if price starts to climb above 111.00 towards the 200-day moving average without any trade headlines.

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