We begin the Fall season with a fall in the Dollar. As we have in the past we are buyers of these dips. While the long term prospects of the Dollar remain grim, in the near to medium term we are cautiously optimistic. We are looking for at least a “dead cat” bounce in the Dollar near term. We are up over 400 pips so far in the trading room this month so I hope all of you have gotten at least some of that.
EUR/USD:
This pair has seen a nice spike above 1.46, we are looking for rallies early this week to sell into so any retest of 1.46 area will be a sell level for us.
GBP/USD:
This pair also saw some nice spikes last week above the 1.67 handle. Any spikes near or above 1.66 should be looked at as sells area’s this week. We are particularly bearish this pair in the near term.
USD/CHF:
We have seen this pair gravitate towards parity lately. While we do expect that level to be breached in time, however near term we are buyers near the 1.04 level.
USD/JPY:
This pair has been attempting to “decouple” from the S&P 500. We are seeing it throw try and off the shackles that have US equities. We expect this pair to bounce around the 90-93 level for the rest of the month and are therefore buyers near the lower end of that range and sellers near the upper boundary.
AUD/USD:
This pair continues to hover above the .85 handle. This pair has both strong potential to remain stable due to solid economic policy by the RBA, and at the same time high risk of a sharp pullback should the Dollar strengthen and commodities falter as a result of that strength. So that being said we want to be extra cautious with this pair but the bottom line is we see more downside risk than upside potential and are therefore selling rallies.
USD/CAD:
This pair is still an attractive long below 1.09. We are looking for a move into the low teens before the end of next month.
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