This week we have a light report schedule and that is likely to cause the forex market to stagger around. We remain Dollar bulls as it continues to pay off. Stocks continue to pivot around the 900 level on the S&P but downside risk outweighs upside opportunity at this time. Look for dips in Dollars to buy into.
EUR/USD:
Sells taken in the 1.40’s to 1.41’s should be solid entry points as discussed last week. Look for breaks towards the 1.38 level to take profits or at least lock in gains. We could see a much deeper correction but for now we will just look very near term. Same comments as last week as it still applies.
GBP/USD:
The cable remains resilient but offering great opportunities on both sides. We are predominately looking for rallies near 1.63 to sell into this week. We are still looking for this pair to fall back below 1.60 before month end.
USD/CHF:
This pair remains a buy close to the 1.08 level. This pair could see a move back into the low teens before this rally stalls. Same comments as the last few weeks and they still stand. They have paid off nicely the last few weeks and we see similar movements in the weeks ahead.
USD/JPY:
This pair continues to hang around the 95 handle the same way the S&P 500 hangs around 900…coincidence??? I think not. For now we will be patient but still overall looking for major rallies to sell into longer term.
AUD/USD:
We are seeing the .8000 level retested and will again look to sell above it. This is a larger play on a commodities slow down as the global recovery continues to be muted to slow at best.
USD/CAD:
When oil was at 72 I mentioned here we would see 55 before we saw 75. Most of you said I was crazy but now back under 65 all of a sudden a get a number of emails agreeing with me…lol. I continue to expect oil to fall back towards that level but will begin covering shorts near $60.00. If crude does continue to pull back then this pair should see further upside. With that being said the downside risk is starting to outweigh upside opportunity so we will use extra caution here this month.
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