Central Bank Showdown, Trade Journaling, GBPCHF Ready to Explode

Good morning fellow traders!

Grab your mugs and get ready to sip on forex success with Currencies & Coffee - the newsletter that brings the perfect blend of market analysis and insights.

Here’s what we have covered today:

☕Central Bank Showdowns, Inflation Intrigue and Employment Figs

☕ Mastering Trade Journaling for Continuous Improvement

☕GBPCHF Ready to Explode

🗞️MOVERS & SHAKERS🗞️

Australia's Central Bank Showdown: The Reserve Bank of Australia (RBA) is set to reveal its monetary policy decision on June 6 at 4:30 am GMT. With the recent mixed bag of resilient economic data and the slowing of consumer spending, there are speculations that the RBA might press the pause button again after the surprise rate hike in May. You might want to bookmark our Event Guide for the June 2023 RBA decision to stay ahead of the curve.

The Land Down Under's GDP: The anticipation continues! A day after the RBA's policy announcement, Australia's Q1 GDP reading will make its entrance on June 7 at 1:30 am GMT. Expectations are on a slow rise, with a 0.3% expected expansion. Will the RBA decision outshine this GDP report? Strong results could trigger tightening expectations, whereas a downbeat read might hint at another pause, influencing the AUD's dance on the forex floor.

BOC's Rate Decision: Ready for another bit of central bank action? The Bank of Canada (BOC) is set to announce its monetary policy decision on June 7 at 2:00 pm GMT. No rate changes are expected, which would be the third consecutive month of BOC's tightening pause. However, a strong GDP rebound and surprising inflation rates in Q1 might persuade policymakers to increase the rate again. Whether they do or not, merely hinting at future tightening could keep the Loonie riding high in the market.

China's Inflation Intrigue: Here's a plot twist from the world's second-largest economy. As China's economic data has been in the spotlight, it's interesting to see that the May headline CPI is expected to have slightly picked up from 0.1% to 0.2%. However, the PPI, a measure of underlying inflation, might reveal a steeper drop from the previous 3.6% to a 4.3% fall.

Canada's Employment Report: For the final act, Canada's employment change figure for May is set to provide more context to the earlier BOC decision. Slated to come out on June 7, a smaller 20K increase in hiring is expected, a downturn from the previous 41.1K gain. This could nudge the unemployment rate up from 5.0% to 5.1%. A lower increase or a surprise decline could lead to expectations of the BOC maintaining its current stance for longer, potentially bringing the Loonie down a notch.

There you have it - a lineup of critical market events that will undoubtedly make waves in the forex ocean.

ECONOMIC CALENDAR

Mastering Trade Journaling for Continuous Improvement

Keeping a detailed trade journal is a powerful tool that can elevate your trading game and drive continuous improvement. By documenting and analyzing your trades, you gain valuable insights into your strengths, weaknesses, and areas for growth.

Consistently Document Your Trades
Make it a habit to document every trade you take, including the entry and exit points, position size, stop loss, take profit levels, and the rationale behind your trade. Include any relevant charts or screenshots to provide visual context.

Reflect on Trade Execution
After each trade, take the time to reflect on your trade execution. Analyze whether you followed your trading plan, adhered to risk management principles, and executed the trade with discipline. Identify any mistakes or areas for improvement.

Analyze Trade Outcomes
Regularly review the outcomes of your trades. Assess the profitability, win rate, and overall performance of your trades. Look for patterns or trends in your results and identify the best strategies or setups for you.

Pinpoint Strengths and Weaknesses
Identify your strengths and weaknesses as a trader based on your trade journal analysis. Recognize the setups or strategies where you consistently excel and areas where you struggle. This self-awareness allows you to focus on improving weak areas while capitalizing on your strengths.

Make Data-Driven Adjustments
Use the insights gained from your trade journal to make data-driven adjustments to your trading strategy. For example, if you consistently struggle with a particular setup, consider refining your approach or seeking additional education in that area.

Set Goals and Track Progress
Set specific, measurable goals based on your trade journal analysis. Whether it's improving your win rate, increasing profitability, or enhancing risk management, set targets and track your progress over time. Regularly review your goals to stay motivated and focused.

Action Steps:

1️⃣ Consistently document each trade, including all relevant details.

2️⃣ Reflect on your trade execution and identify areas for improvement.

3️⃣ Analyze trade outcomes to identify patterns and trends.

4️⃣ Recognize your strengths and weaknesses as a trader.

5️⃣ Make data-driven adjustments to your trading strategy based on your trade journal analysis.

6️⃣ Set specific goals and track your progress over time.

By maintaining a comprehensive trade journal and leveraging its insights, you can continuously improve your trading skills, optimize your strategies, and achieve greater market success.

SIP, LAUH, TRADE 😁

📈LATTE LINEUP📈

-AUDCAD-

HTF(Daily): Previously, the price of AUDCAD was range bound, but a downside breakout occurred, forming a new lower low. Currently, the price is retracing towards the previous support level, which we anticipate will act as resistance. Our objective is patiently awaiting candlestick formations confirming sellers' return, signalling a potential selling opportunity.

Taking note of the overall quality of the move, we observe a symmetrical pattern characterized by a clear lower low and a decisive break of support. These factors contribute to the bearish sentiment surrounding the pair. We rely on the candlestick formations to validate our bearish bias and establish a robust sell opportunity. These candlestick patterns will provide critical insights into sellers' participation, reinforcing the anticipated downward direction.

By closely monitoring the candlestick formations and discerning the sellers' return, we position ourselves strategically to capitalize on potential selling opportunities.

LTF (1-HR): Following our HTF confirmations, we eagerly await the translation of bearish pressure into a shift in market structure on the 1-hour chart. This shift involves transitioning from the formation of higher highs and higher lows to lower highs and lower lows.

We anticipate a break and subsequent retest of the 1-hour market structure to position ourselves optimally. This price action pattern confirms the emergence of a bearish bias. When the market structure breaks, triggering our entry, we enter the trade with a stop loss positioned above a previous high. Our target is set at the daily low, located around 0.8780.

As always, we emphasize the importance of patience in trading. It is essential to let the price action develop and adhere to our predefined trading strategy.

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-AUDUSD-

HTF (Daily): Similar to AUDCAD, AUDUSD has also formed a distinct lower low, indicating bearish momentum. The price has retraced towards the previous support level, which now acts as resistance. Additionally, we observe the confluence of the 50% Fibonacci retracement, further enhancing the significance of this zone.

To validate the presence of sellers and identify potential entry opportunities, we eagerly await candlestick rejections or engulfing patterns around the current levels or even higher. These candlestick formations will provide insights into the sellers' interest and strengthen our bearish bias.

LTF: As the price action develops, we will provide an updated game plan in our Nexus Hub, detailing potential entry strategies and trade opportunities on the lower time frames. It is crucial to remain adaptable and adjust our approach based on evolving market dynamics.

-GBPCHF-

HTF(8-HR): GBPCHF was previously range-bound. The price has now formed a new higher high, indicating a potential shift in market dynamics. Notably, the price retraced towards the previous resistance level, which is now expected to act as support.