📌 February 17 – USD/JPY Plummets on US CPI! Reaffirming the Importance of Risk Management

 

📌 February 17 – USD/JPY Plummets on US CPI! Reaffirming the Importance of Risk Management

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✅ Weekly Trading Results (February 10 – February 14)

📉 Total P&L: -90,113 USD

🚨 Main Stop-Loss Trades

• EUR/USD Short at 1.0330 → Stopped out at 1.0412 (-82 pips)
• USD/CHF Long at 0.9146 → Stopped out at 0.9093 (-53 pips)

✅ Only Profitable Trade

• AUD/JPY Long at 96.62 → Closed at 96.80 (+18 pips)

📌 Market Characteristics

• Stronger-than-expected US CPI → USD buying trend
• Subsequent sharp decline in US long-term yields → USD selling and JPY buying intensified
• Ukraine ceasefire negotiations → Risk-on sentiment boosted EUR and AUD
• Gold (XAU/USD) surged significantly → Continued inflows into safe-haven assets
• Bitcoin (BTC/USD) surpassed $100K but entered a correction phase

📌 Biggest Mistakes

• Failed to capture the sharp drop in USD/JPY
• Misjudged the uptrend in EUR and GBP
• Position sizing and risk management were inadequate

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📌 Last Week’s Market Overview (February 10 – February 14)

🎯 1. USD/JPY

📉 Trend: High volatility and sharp decline
🔎 Market Movements

• US CPI exceeded expectations, pushing USD/JPY up to 154.80
• Then, US long-term yields plummeted, bringing USD/JPY down to the 152 level
• BOJ rate hike expectations also strengthened JPY buying pressure

🎯 2. EUR/USD

📈 Trend: EUR buying momentum
🔎 Market Movements

• EUR surged on Ukraine ceasefire progress
• USD weakened, lifting EUR/USD to the mid-1.04s
• Reduced ECB rate-cut expectations provided support for the euro

🎯 3. GBP/JPY

📉 Trend: Wide fluctuations
🔎 Market Movements

• BOE’s 0.25% rate cut decision led to GBP selling
• GBP rebounded on risk-on sentiment
• Dropped to the 188 level before recovering to around 193

🎯 4. Gold (XAU/USD)

📈 Trend: Steady uptrend
🔎 Market Movements

• Geopolitical risks and Fed policy uncertainty drove demand
• Remained strong throughout the week, though some profit-taking occurred by the weekend
• A short-term correction is possible, but buying dips remains a viable strategy

🎯 5. Bitcoin (BTC/USD)

📈 Trend: Correction after surpassing $100K
🔎 Market Movements

• After breaking the $100K mark, BTC faced short-term profit-taking and weakened
• A push above $110K requires new catalysts
• Continue applying a “buy-the-dip” strategy

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📌 Outlook for the Week of February 17

🎯 1. USD/JPY

📉 Trend: Range-bound trading expected
🔎 Key Factors

• Japan’s January CPI on the 21st → May strengthen BOJ rate hike expectations
• FOMC Minutes (Jan 28-29) → Assessing the possibility of Fed rate cuts
• US-Japan Summit → Trump’s potential remarks on “reducing US trade deficit with Japan” could drive JPY appreciation

🎯 2. EUR/USD

📉 Trend: Weakening
🔎 Key Factors

• Progress in Ukraine ceasefire talks
• ECB rate-cut expectations may cap EUR gains
• German general election on the 23rd → Risk of far-right AfD party gains impacting EUR

🎯 3. Gold (XAU/USD)

📈 Trend: Short-term correction possible, but buy-the-dip strategy remains valid
🔎 Key Factors

• Persistent geopolitical risks
• Uncertainty around Fed’s monetary policy
• Beware of short-term profit-taking while looking for dip-buying opportunities

🎯 4. Bitcoin (BTC/USD)

📉 Trend: Range-bound around $100K
🔎 Key Factors

• A push above $110K requires new bullish catalysts
• Maintaining a short-term dip-buying strategy

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📌 Key Economic Events for the Week of February 17

📅 February 17-18 – RBA Policy Decision (AUD)
📅 February 19 – RBNZ Policy Decision (NZD)
📅 February 19 – South Africa January CPI (ZAR)
📅 February 23 – German General Election (EUR)

📢 Conclusion:
The market is digesting the impact of the US CPI release and US-Japan trade negotiations while continuing a risk-on trend.
FOMC Minutes and Japan’s CPI will be key to the next moves in the forex market🔥

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📌 Lessons from This Week

❌ Position sizing was inadequate → Risk management must be reinforced
❌ Misjudged trend reversals → Need to stay flexible with market themes
✅ Mental discipline is key! → A well-managed trading mindset leads to long-term success

Next week, I will focus on careful entries and aim to accumulate profits consistently🔥