Daily Forex Commentary
By Jack Crooks

Key News
- The Bank of Japan raised interest rates for the first time in almost six years. (Bloomberg)

Key Reports (WSJ)
8:30am: June import prices. Consensus: +0.2%. Previous: +1.6%.
8:30am: June retail and food sales. Consensus: +0.4%. Previous: +0.1%.
8:30am: June retail sales, ex-food and energy. Consensus: +0.4%. Previous: +0.5%.
9:45am: Mid-July University of Michigan sentiment index. Consensus: 86.
Previous: 84.9.
10am: May Business Inventories. Consensus: +0.4%. Previous: +0.4%.

Quotable
"Unfortunately the world has not been designed for the convenience of mathematicians. There is much in economics that is best described by this wilder, unpleasant form of randomness - perhaps because economics is about not just the physics of wheat, weather and crop yields, but also mercurial moods and unmeasurable anticipations of wheat farmers, traders, bankers and consumers." - Benoit Mandelbrot, The Misbehaviour of Markets

FX Trading
Interest rates, inflation rates, liquidity, supply, demand, relative value, intermarket correlation, irrational behavior and geopolitics - to name a few variables in this equation we call speculation.

- A real catalyst starts the ball rolling
- Traders jump on the trend, validated by the fundamentals
- More traders hop on, validated by price
- More traders hop on, motivated by greed
- Some traders hop off, thinking about value
- More traders hop off, as prices don't bounce
- The rest run for the exits, motivated by fear

Whatever name we want to give this game, in whatever time frame we wish to play it, it seems the more and more we try to break down its components, we can come back to only one consistent pattern - boom and bust.

Japan did its thing. Stocks are tumbling. Gold is rising. Oil is rising. The Middle East is burning. And we have June import prices to worry about on Friday morning. Be careful out there.

Black Swan offers a subscription-based currency advisory service for forex and futures traders.

Jack Crooks has actively traded in global equity, fixed income, commodity, and currency markets for more than 20 years. He is president of Black Swan Capital, a currency and commodities market advisory firm - BlackSwanTrading.com