Selling Into Rallies
Last week I mentioned that we would see the majors roll over and begin to correct. That is clearly now what we have seen. I am still expecting more downside and am biased to selling into rallies more than buying dips. That means when I do buy dips the trades size on the buy side will be smaller than that of the sell side.
EUR/USD:
This pair has now fallen below 1.30 and besides the bounce along the way down I expect to see this pair grind towards the 1.25 handle for the rest of the month.
GBP/USD:
This pair is also a sell on rallies this week. I am looking for a bounce here early this week but after that we are sellers again.
USD/CHF:
This pair is a now back above 1.17 and we could see a push above 1.18 before this rally finds real resistance.
USD/JPY:
This pair is still “stuck”. Near term I remain biased to selling rallies but overall I am not to interested in this pair in the near term.
AUD/USD:
This pair did finally resist out above 73 and for now I expect to see it correct below at least 70. We could see it fall back into the mid 60 longer term but for now we will wait for major rallies to sell into.
USD/CAD:
This pair did push lower than expected before turning back up. I am looking for rallies to sell into above the 1.2350 level but with low size as this pair in particular could “blow off” above 1.25.
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