I have been asked how I create this report, so here is a description of what I do every Saturday morning.
The mechanical part of creating the report is straightforward. The 12-box chart at the top is created using a two TradingView templates, as the software only allows a maximum of eight charts displayed at once. These templates are already set with the instruments, colours, correct decimal places for scales and so on. I took a screenshot the first time I did it, and keep that to size my browser so that every week is the same size. TradingView has an option to show ‘last five days’ so when used after midnight on Saturday, it displays these week’s charts.
Having taken two fresh screenshots, I manually cut and paste the labels from last week, and paste the bottom four charts in, then add the title.
The price table is completely automatic, as I have set up a spreadsheet in Google Sheets using the =GOOGLEFINANCE function, which fetches the daily percentage gains, closing prices and so on. The ‘Weekly Price’ section is written using this table.
I have a text copy of last week’s report. I make a note of last week’s results (beats or misses) from FXStreet’s economic calendar, and using the table and chart, a note of whether each instrument went up or down for each of the five days.
For the forthcoming week, I set FXStreet’s calendar to ‘Next Week’, and filter level 2 or higher events (the classification is 1-3), and then take the result into Excel using the ‘export CSV’ button. I cut and paste just the time, currency and event and create the event list for next week, making level 3 events bold. I also take note of any market holidays, opex dates etc. In earnings season I get a list of the important earnings dates from Stocktwits earnings calendar. I also look at Reuters Take Five and CNBC Week Ahead for anything that may not be on the calendar, or for more details.
Now comes the interpretation of why things happened last week, for which I rely on my trading experience. I look at the charts for big moves and write about them first. Some are obvious—an unexpected rate hike will push the dollar much higher and US stocks lower. Some are more subtle, and if I can’t see immediately why a market moved the way it did, I will check the financial press for that day, typically the London Financial Times and the Wall Street Journal, or CNBC and Bloomberg. For forex moves, again I use FXStreet.
Most of the time, when the dollar moves up or down, it does so against all currencies. If one currency moves in a different way, I will check the news for that country/zone. The answer is usually found very quickly.
Obviously there are basics—when stocks go down, JPY and Gold (safe havens) go up. Bonds are safe havens too, but they are affected more by interest rate expectations, and so yields go up with the dollar, but down when stocks fall (as money moves from stocks to bonds). But rate hikes push the dollar up and stocks down, so which is it? A look at other currencies usually provides the answer, for example CAD and AUD move the other way to JPY and Gold in a risk-off situation. Yet Gold moves AUD in the same direction. What’s the right reason on the day. Having watched all these instruments for years tells me how much the effect of these factors is, hence why I say ‘surprisingly Gold moved up’, meaning I don’t know why, the conventional wisdom says it should have gone down, or ‘Gold moved up in line’, meaning it did what you expect. There are of course myriad factors to take into account, and maybe I don’t always get it right. I do make an effort to look at the intraday price, so if the market went down in early trading despite a positive event, and then went up later on, on a second positive event, I won’t attribute the first one.
There are also intermarket events, when GBP goes down, the FTSE 100 index goes up, because its heaviest constituents are dollar-traded, and that link is real and permanent. However, CAD is supposed to be an oil proxy despite only 13% of Canada’s economy being energy-based, and the link is more sentimental. JPY is a reliable risk-off asset, whereas CHF, another safe haven, is increasingly less so. I have spent a long time looking at how strong these links are.
Remember in the very short term, everything is driven by sentiment, which can turn on a dime, and there is very often a different sentiment in the Asian, European and US markets (a domestic bias) which is reflected in markets turning at the key session opening points, which are 0700-0800GMT as Asia segues into Europe and typically about 1330 (US news release time) as NY traders come online. I do take account of technicals, but these rarely cause sharp pivots. Resistance and support tend to cause consolidation (ie a trend stops) rather than immediate reversal.
So overall, it is about compiling a calendar, and then adding unplanned events (statements from central bankers and heads of government being the most important), and correlating these to market moves.
I hope you find it useful.