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- The week in FX: July 15, 2025
The week in FX: July 15, 2025
Real-World Trading Insight. No Hype, Just Edge.
mark schaefer
July 15, 2025
USD bounced 1.5% after its 12% YTD selloff. It could easily rally another 3-4% and still be in a broader downtrend.
So where's the opportunity?
If you're trying to decide whether this is retracement or reversal, you're asking the wrong question.
After 30 years managing systematic FX strategies—including delivering +25% returns in both 2008 and 2009 while scaling from $50M to $330M during the financial crisis—I've learned this: uncertainty is where opportunity lives.
Welcome to Meridian Compass. This isn't another newsletter predicting market direction. This is institutional-grade intelligence for traders who understand that edge comes from systematic thinking, not market timing.
Why the USD Pullback Changes Nothing
The structural drivers haven't changed:
• Policy uncertainty escalating
• Technical structure intact
• Central bank policy divergence persisting
Institutional Reality: When you've managed hundreds of millions through multiple cycles, you learn that pullbacks in trending markets usually offer better entries, not reversal signals.
The recent bounce feels significant because retail sentiment was getting stretched. But systematic models that survived decades of market cycles teach a different lesson: respect the larger structure until it actually breaks.
This is exactly why institutional portfolio construction requires systematic screening across a diverse and balanced universe of FX pairs. Currency crosses provide essential diversification—not as alternatives when major pairs fail, but as core components of any systematic approach.
How the Framework Delivers Results
Here's why: currency crosses can present a different set of opportunities away from USD narrative noise. When major pairs are trending, systematic screening can identify setups in currency crosses that might not appear in USD based pairs, highlighting the importance of expanding and diversifying the trading universe.
EUR/AUD got a good signal to short when the pair was trading near the top of its three-month channel. The position was held for three days until it hit its target for a gain of 175 points with 1:3.7 risk/reward. This was a clean mean reversion setup within a well-established range structure.
📈 EUR/AUD Short - Systematic Signal
🎯 Systematic Framework
1. What's the current market regime? (Trending, ranging, transitional, event-driven, or sentiment extreme)
2. How to quantitatively identify the best risk-reward setups?
3. How do I manage the position systematically? (Acceptable volatility range, minimum R/R requirement, limit entries, volatility sizing and stop placement, trailing stops, no emotions)
📅 Key Markets This Week
• EUR/USD - Trading at mid-Bollinger band (20-day MA), momentum neutral
• GBP/USD - Approaching oversold toward lower Bollinger Band and last month's low of 1.3370
• GBP/AUD - Trading at lower channel support 2.0490, held for 3 months. Watch for close above/below
• EUR/AUD - Holding lower channel support at 1.7765, 3-month technical level
🎯 Next Week: Advanced Systematic Analysis
I'll dive deeper into the systematic frameworks and market structure analysis that drive institutional trading decisions.
Plus: Key technical developments across major currency pairs and what systematic traders are focusing on in the current environment.
🔥 Coming Soon: Meridian Compass Pro
Live model performance review
Multi-timeframe analysis
Regime transition frameworks
Learn the methodology, not just the setups
📊 What Would You Like to See More Of?
Help shape future Meridian Compass content—let me know what's most valuable:
📈 Live Trade Examples
Real positions with entry/exit analysis
⚙️ Systematic Strategy Breakdowns
How institutional frameworks actually work
💱 Currency Crosses - Opportunities
Relative value setups away from major pairs
🛡️ Risk Management Frameworks
Position sizing and correlation analysis
Reply with your choice or email me directly at [email protected]
Questions? Feedback? Reply to this email—I read every response.
MERIDIAN COMPASS • Institutional FX Intelligence
Email: [email protected]
Meridian Compass is brought to you by Mark Schaefer, a quantitative portfolio manager with over 25 years experience developing and trading systematic strategies in global futures and FX at major banks and hedge funds.
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