Relative Strength & Strategy Insights | Updated: Feb 21, 2026 at 12:02:20
Strong jobless claims and Philly Fed data support, but trade deficit widens unexpectedly, geopolitical tensions (U.S.-Iran) create risk-off sentiment, and dollar retreated recently. Mixed signals with underlying strength but near-term headwinds.
Stable GDP growth (0.3% QoQ) and positive trade balance (12.6B), but geopolitical worries from Ukraine-Russia conflict weigh on sentiment. French unemployment slightly up. Overall steady but with external risks.
Market significantly lower, reversing gains, with weakness across sectors. Strong current account (7,288.0B) and PPI steady, but stock market declines and risk-off flows may pressure JPY as safe-haven demand mixed.
Inflation fell to 10-month low (3.0%), boosting rate cut expectations, but pound strengthened despite weak data. GDP growth steady (0.1% QoQ), trade deficit narrows (-4.34B vs -6.12B). Positive momentum from dovish BoJ outlook.
Jobless rate holds at 4.1%, wage growth steady (0.8% QoQ), but consumer confidence declines (-2.6%), building permits slump (-14.9% MoM), and market modestly lower. Mixed domestic data with external risk from China.
Commodities strength supports, building permits surge (6.8% MoM), and market poised for gains on easing geopolitical tensions. Positive sentiment from oil and materials sectors.
Business PMI strong (55.2), inflation expectations rise (2.37%), but limited data overall. Positive domestic indicators but exposed to global risk sentiment.
Consumer confidence improves slightly (-30.0 vs -31.0), inflation stable (0.1% YoY). Safe-haven demand may rise from geopolitical tensions, but data limited. Neutral with upside from risk-off flows.
| Strategy Pair | Action | Target | Strategy Rationale |
|---|---|---|---|
| GBP/USD & CAD/USD | LONG BASKET | Dist: +150 pips | Isolating USD mixed/weak sentiment by longing GBP (strengthening on dovish BoJ) and CAD (commodity-driven strength) to hedge against single-currency risks in GBP or CAD-specific events. |
| EUR/JPY & AUD/JPY | LONG BASKET | Dist: +180 pips | Capitalizing on JPY weakness from market declines and risk-off flows, while longing EUR (stable) and AUD (mixed but higher-yielding) to diversify Eurozone and Australian exposures. |
| GBP/JPY & CAD/JPY | LONG BASKET | Dist: +200 pips | Aggressive play on JPY weakness combined with GBP and CAD strength. Pairing two commodity/risk currencies against JPY to amplify momentum while reducing idiosyncratic risks in either GBP or CAD. |
| EUR/CHF & USD/CHF | SHORT BASKET | Dist: -90 pips | Betting on CHF strengthening from safe-haven demand due to U.S.-Iran tensions, while shorting EUR and USD to neutralize specific Eurozone or U.S. macro biases. CHF likely outperforms in risk-off. |
| AUD/USD & NZD/USD | SHORT BASKET | Dist: -120 pips | Targeting USD resilience against commodity currencies. AUD and NZD face mixed domestic data and China risks, while USD has underlying strength from labor market. Basket reduces exposure to single Antipodean shock. |
| EUR/GBP & USD/GBP | SHORT BASKET | Dist: -100 pips | Isolating GBP strength post-inflation drop, shorting EUR and USD against it. GBP momentum from dovish repricing may outpace steady EUR and mixed USD. Basket mitigates Eurozone or U.S.-specific surprises. |