Wed, Sep 23, 2026. Full report (upgraded: trade booked, board changed).
Entry 1.33130 · target 1.32150 · stop 1.33750 · reward 1.6× risk · spot 1.33133
The Fed took the target to 4.00% from 3.75% on 16 September with fresh projections and the market is pricing further tightening, with the 10Y at 4.96% near the top of its range and DXY at 100% of its 20-day range, while the MPC held Bank Rate at 3.75% on 17 September on a 3-0-6 vote and spent the meeting on gilt sales rather than rates. Sterling carries an extra negative the euro does not: a jump in UK borrowing is being cited directly for the slide, Deutsche Bank has published a sell recommendation, and flash services PMI is forecast at 52.0 from 52.8 at 08:30Z today. That is why I short GBP/USD rather than EUR/USD, where hawkish ECB rhetoric from Lagarde and Nagel still gives the euro a floor and the 12.75% five-day fall in WTI is a terms-of-trade gain for an energy importer. Structure agrees: 1.33133 sits at 1% of the 20-day range, below the 20-, 50- and 100-day averages, with the 60-day low at 1.32732 the next objective. It is invalidated by a services PMI beat that closes the pair back above 1.3375, or by Bailey on 25 September pushing back on fiscal-driven weakness; the honest caveat is positioning, with specs already net short 58,715 contracts, 18.7% of open interest and unchanged on the week.
🟢 Risk-on (clear). Helps AUD, USD; hurts JPY, CHF.
VIX is 14.87, down 13.04% over five days and at 21% of its 20-day range, with the S&P 500 at 7765, up 1.90% over five days and at 95% of range. Gold has fallen 6.95% over 20 days to 21% of range and AUD/JPY is +1.16% over five days, both consistent with haven demand draining. Headlines describe stocks holding near a record after the oil dip and Asian equities gaining on a tech surge, with no credit stress in the feed.
| Commodity | Direction | Helps | Hurts | Note |
|---|---|---|---|---|
| oil | 🔴 DOWN | JPY, EUR, GBP, CHF | CAD | WTI is 89.37, -5.52% on the day and -12.75% over five sessions; Brent is 98.60, -6.83% over five days. The driver is diplomacy: Trump called US-Iran talks 'very productive', Hormuz traffic has resumed and a Saudi pipeline restarted. |
| gold | 🔴 DOWN | USD | CHF, AUD | Gold is 4368.1, -0.44% over five days and -6.95% over 20, at 21% of its 20-day range, the mirror image of a 100%-of-range DXY and a 4.96% 10Y. Falling haven demand alongside firm equities confirms the risk-on read rather than contradicting it. |
| copper | 🟢 UP | AUD, CAD | JPY | Copper is 6.819, +6.03% over five days and at 85% of its 20-day range. The caveat is Chinese demand: the ADB held China growth at 4.6% but cut its inflation forecast below 1%, which keeps deflation risk in view. |
| iron ore | 🟢 UP | AUD | JPY | No price feed; the news carries it. Iron ore is reported rising on supply risks, with El Nino disruption in Brazil offering support. |
| natural gas | 🟢 UP | USD, CAD | EUR, GBP, JPY, CHF | US natural gas is 3.169, +6.88% on the day, +9.62% over five days and +14.40% over 20, at 94% of its 20-day range. This is the energy-cost leg behind Lagarde's warning of prolonged inflation and the FT's 'more hawkish ECB' framing, and it is a terms-of-trade drag on the European importers even as crude falls. |
| Currency | View | Conviction | Rate now | Next meeting | Path vs priced | Non-rate factor |
|---|---|---|---|---|---|---|
| USD | 🟢 UP | ●●● | 3.63% effective (FRED, August); the FOMC target was raised to 4.00% from 3.75% on 16 September | not in feed; late October FOMC: ⬆️ hike (leaning) | more hawkish than priced | Tariff politics is constant background noise, including warnings that tariffs on Canada could hit manufacturing jobs, but it has not dented the bid. |
| GBP | 🔴 DOWN | ●●○ | 3.75% Bank Rate (FRED UK series failed today) | not in feed; next MPC decision in November, Bailey speaks 25 September 09:15Z: ➡️ hold (likely) | as priced | Positioning is heavy and static: large specs net short 58,715 contracts, 18.7% of open interest, essentially unchanged on the week, so there is no fresh fuel from shorts but also no squeeze trigger. |
| JPY | 🔴 DOWN | ●●○ | 0.977% immediate rate (FRED, August); the BOJ raised the policy rate on 18 September to below 1.25% from below 1.00% | not in feed; next BOJ decision late October: ➡️ hold (leaning) | as priced | Intervention is the live cap. USD/JPY is 157.63 with potential intervention explicitly eyed, and specs are net long yen 120,359 contracts, 22.2% of open interest, after a +109,563 weekly build, a crowded long that bleeds as the pair grinds higher. |
| AUD | 🟢 UP | ●●○ | 4.35% | not in feed; commentary points to a decision in the coming week: ⬆️ hike (likely) | as priced | Commodities are supportive on both legs: copper +6.03% over five days at 85% of range, and iron ore reported rising on supply risks and Brazilian weather disruption. |
| CAD | 🔴 DOWN | ●●○ | not in feed; the FRED Canada rate series failed today [Source: Data errors] | not in feed; next BoC decision in October: ➡️ hold (leaning) | as priced | Oil is the whole trade. WTI -12.75% in five days on Iran diplomacy and Hormuz reopening, with the loonie described as vulnerable on exactly that, and tariff risk to Canadian manufacturing in the background. |
| EUR | 🔴 DOWN | ●○○ | 2.50% deposit rate | not in feed; the ECB decided 10 September, next decision late October: ➡️ hold (leaning) | as priced | The ECB itself flags China's industrial rise squeezing German manufacturers out of global markets, and US nat gas at 94% of range keeps the energy-cost drag alive. |
| CHF | ⚪ FLAT | ●○○ | 0.00% SNB policy rate; 3M interbank -0.045% (FRED, August) | Sep 24 07:30Z SNB Monetary Policy Assessment, press conference 08:00Z: ➡️ hold (likely) | as priced | The franc cuts both ways: it firmed 0.55% against the basket over five days on its haven bid, but it is a carry-funding currency in a risk-on tape and weakened on hawkish Fed sentiment. |
View is against the basket of the other six over 2-5 days; conviction is The desk's own, 1 to 3. Scored at 3 trading days.
The dollar is the whole story this week. DXY is 100.75, up 1.10% in five days and sitting at the very top of its 20-day range, while the 2Y holds 4.76% and the 10Y 4.96%, near the high end of its range. The 16 September FOMC took the target to 4.00% from 3.75% with fresh projections, and the tape is being written around "hawkish Fed sentiment" and further hike bets. Against the basket USD is +0.91% over five days, the best of the seven; GBP (-0.49%) and JPY (-0.86%) are the worst.
Risk appetite is firm and is not fighting the dollar. The S&P is 7765 at 95% of its 20-day range, VIX is 14.87 and down 13.04% in five days, gold is -6.95% over 20 days at 21% of range, and AUD/JPY is +1.16% over five days. The second theme is energy: WTI is 89.37, -5.52% on the day and -12.75% in five sessions, on US-Iran diplomacy at the UN, Hormuz traffic resuming and a Saudi pipeline restart. That directly undercuts the loonie, and it also complicates the ECB's newly hawkish energy narrative, since the Bundesbank chief has just said oil is increasingly important to rate decisions.
The two live central-bank events are tomorrow: the SNB assessment at 07:30Z with the policy rate forecast unchanged at 0.00%, and Australian employment at 01:30Z, forecast +22.5K with unemployment at 4.5%, after Bullock said inflation fears are materialising and that unemployment may need to rise to 5%. On the record, my conviction-3 currency calls run 8 of 13 while conviction-2 calls run 3 of 19, so today I concentrate weight where evidence is strongest and keep the rest light.
| Size | Change | |
|---|---|---|
| USD | ▫️ small | conviction 2 → 3 |
| EUR | ‼️ big | direction flat → down |
| EUR | ‼️ big | path vs priced: more hawkish → as priced |
| GBP | ▫️ small | decision confidence leaning → likely |
| GBP | ▫️ small | conviction 1 → 2 |
| Impact | Ccy | Headline | Pushes | Reading |
|---|---|---|---|---|
| 🔥 large | CAD | Oil prices fall after Trump hails 'very productive' US-Iran talks; Hormuz traffic resumes and a Saudi pipeline restarts | CAD down → USD/CAD up, AUD/CAD up | WTI -5.52% on the day and -12.75% over five sessions removes the terms-of-trade support that was holding the loonie up, with the BoC not due until October. |
| 🔸 medium | AUD | RBA Governor Bullock says inflation fears are materialising; unemployment may need to rise to 5% to ease inflation | AUD up → AUD/CAD up, GBP/AUD down | The hardest hawkish language on the board, but with a hike effectively priced the data now has to confirm it, which makes tomorrow's employment print the test. |
| 🔸 medium | GBP | Sterling slips as UK borrowing jump pressures pound; Deutsche Bank publishes a sell recommendation | GBP down → GBP/USD down | With the MPC holding at 3.75% and reworking gilt sales rather than rates, the fiscal story is the marginal driver of sterling rather than the policy path. |
| 🔸 medium | EUR | Bundesbank's Nagel says oil prices are increasingly important for ECB decisions and that restrictive policy cannot be ruled out | EUR down → EUR/USD down | He made crude the swing variable at the moment crude fell 12.75% in five days, which removes the mechanism that would force a hawkish step and downgrades the euro path to as-priced. |
| 🔸 medium | JPY | Japanese Yen softens on BoJ's lack of hawkish guidance, potential intervention eyed | JPY down → USD/JPY up, EUR/JPY up | The 18 September hike came without forward guidance, so the roughly 4-point differential against the US keeps the yen offered, capped only by intervention risk. |
| ▫️ small | CHF | Swiss Franc weakens as US Dollar rises on hawkish Fed sentiment; SNB threatens FX intervention ahead of tomorrow's assessment | CHF down → USD/CHF up | With the policy rate forecast unchanged at 0.00% and 3M interbank at -0.045%, the exchange rate is the SNB's only lever, so the presser matters more than the rate. |
| ▫️ small | AUD | ADB holds China growth at 4.6% but cuts its inflation view to below 1% | AUD down → AUD/USD down | Chinese deflation risk is the standing caveat under the copper and iron ore bid that supports the Aussie. |
| ▫️ small | USD | Goldman Sachs: US inflation less entrenched than in other economies | USD down → EUR/USD up | The only counterweight in the feed to the hawkish Fed narrative, and it sits against CPI still rising to 334.131 in August and 1.5% annualised growth. |
| ▫️ small | EUR | US natural gas +6.88% on the day, +14.40% over 20 days, at 94% of its 20-day range | EUR down, GBP down → GBP/USD down | The energy-cost leg behind Lagarde's inflation warning is also a terms-of-trade drag on the European importers, partially offsetting the crude fall. |
TRADES (The desk's own, target/stop/expiry): 0 won, 6 lost, 3 expired/closed of 9 (0%), net -374 pips; 6 open Conviction 3: 0 won, 0 lost, 1 expired/closed of 1 (0%), net +40 pips Conviction 2: 0 won, 5 lost, 1 expired/closed of 6 (0%), net -249 pips 4 of 4 conditions: 0 won, 1 lost of 1 (0%), net -32 pips 3 of 4 conditions: 0 won, 3 lost, 1 expired/closed of 4 (0%), net -175 pips 2 of 4 conditions: 0 won, 0 lost, 1 expired/closed of 1 (0%), net +40 pips 0 of 4 conditions: 0 won, 1 lost of 1 (0%), net -42 pips IDEAS (direction at the horizon): 3 right, 10 wrong, 2 flat of 15 (20%), net -1052 pips; 16 pending, next due Thu 24 Sept CURRENCY CALLS (direction vs basket, 3 trading days): 13 right, 18 wrong, 12 flat of 43 (30%); by conviction 4: 1/5, conviction 3: 8/13, conviction 2: 3/19, conviction 1: 1/6; 24 pending
One trade today, not three. The book already carries five positions and they lean the same way: long dollar twice, short CAD twice, long AUD twice. The scorecard says my conviction-2 trades are 0 for 6 and my ideas run at 20%, so the correction is fewer, less correlated positions rather than more expressions of the same view. GBP/USD is the one pair where a currency-specific negative sits on top of the dollar bid, and I have deliberately not stacked another AUD long ahead of tomorrow's employment print. What I am watching: UK flash services PMI at 08:30Z today, Australian employment and the SNB assessment tomorrow morning, and Bailey on Friday. What would change my mind is the dollar itself: DXY is at 100% of its 20-day range with the 10Y already easing to 4.96% from 5.01%, so one soft US print or a dovish Fed voice unwinds three of my five positions at once. A crude rebound on failed Iran diplomacy is the other single event that hits the CAD shorts together.
Data warnings: news: FXStreet: 403; Federal Reserve (USD): 404