GM Filing for Bankruptcy
We start the summer off with GM filing for bankruptcy, the largest ever in US history. We continue to bail out every industry that is hobbled by the current economic climate. While this may have the appearance of a government that is trying help make things better, in fact the cure is worse than the disease. We have seen throughout this time the value of the Dollar itself continue to fall. While this may not seem like a big deal to the average person, in fact it is a huge deal. As the dollar falls it acts like a tax, making goods and services, especially any which are imported, more expensive. So while a weak dollar may help the government as a whole, it does so at the expense of its people.
EUR/USD:
The continued dollar weakness has pushed this pair above the 1.42 level. At this point we do not want to either call a top or chase after this thing so we will stand aside until we get a clearer picture.
GBP/USD:
This pair also continues to move higher on the back of the already mentioned weakening dollar. We are also being patient with this pair but could become sellers on rallies above 1.64.
USD/CHF:
This pair is still moving towards parity and should retest those levels before the summer is over. We are looking at support near the 1.0555 level as a potential reversal zone.
USD/JPY:
This pair has been chopping around the 95 level. We are buyers near the 94 level should the May lows hold.
AUD/USD:
This pair has gone parabolic and could see prints as high as .8400. We do not want to trade this pair at this level until we see signs of a turn. There is too much risk to chase after it and it is still a bit too early to call a top to we wait. Remember successful trading is waiting.
USD/CAD:
This pair also seems to be on the express route towards parity. We are buyers this week near the 1.08 level but risk here remains high. If crude oil moves back above $75 a barrel then we would expect this pair to trade back below parity.
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