Friday’s NFP report shocked the world when it reported a much smaller number than expected. Markets are still trying to digest this. Bottom line is “a single number does not make a trend”, and while I am happy to see this number I am not expecting it to have the longer term traction that many expect. This data point is an “outlier” and will of course be revised as they almost all are the following month. I have been a buyer of Dollars for some time and expect this bounce to be short lived and recent lows retested before they year is over. While this trade is crowded, rarely does a market simply turn on a dime without at least some kind of “hippy shake” So overall this week we are looking to sell Dollars instead of the usual buy. We expect to see the Majors swing wildly over the coming weeks so be ready.
EUR/USD:
We are now looking to buy this post NFP dip if you will. We are long from below 1.4750 looking for a move back towards at least 1.49.
GBP/USD:
This pair is also a buy on Dips early this week with the intention of exiting by end of month at latest. Look for this pair to possibly retest above 1.65 later this week or next.
USD/CHF:
This pair has moved 250+pips since we suggested buying it last issue. IF you are still in it I suggest taking at least partial profits here and look for a swing back towards at least 1.01.
USD/JPY:
As I warned in the last issue this pair in particular would and has seen wild movement as global risk continue to rebalance. We are now buyers of dips this week but still approach this pair with caution as risk aversion is anything but over…Those were my comments from last week and since then we have seen this pair move over 500+ points so I hope you all realize why I sounded the warning in the last issue.
AUD/USD:
We continue to fade the current commodity bubble by shorting this pair on spikes and will continue to do so into next year.
USD/CAD:
This pair continues to lead the other majors During the NY session and is showing signs of near term exhaustion.
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