We are still seeing this slow turn back up in the Dollar. We expect this to be a slow and choppy turn and still have about 45% chance of seeing lower lows one more time. Use dips as buying opportunities. While the longer term outlook for the Dollar remains grim the near term we see mush more upside opportunity than downside risk.
EUR/USD:
This pair spiked last week and we sold into that spike and covered for a decent profit ahead of the weekend. We are once again looking for rallies to sell into this week.
GBP/USD:
This pair is now trading near the 1.62 handle so those of you who put shorts on near the 1.67 handle as suggested in the last few issues, I would suggest locking in gains and or simply exiting with 500+ pips gain. Patience pays well doesn’t it?!
USD/CHF:
We continue to be buyers below the 1.04 level in this pair. We expect this pair to move back towards 1.10 at least before the end of the year.
USD/JPY:
This pair has decoupled more or less and is now searching for a new “master.” W suspect that simply due to lack of other options it will come back to the S&P500 but for now it remains in a world of its own. Until we see it “recouples” we will prefer trades in other markets.
AUD/USD:
This market is likely to prove to be on of the best shorts of all the majors as when we look back from the end of the 1st Quarter 2010. We are happy sellers of rallies near the .87 handle.
USD/CAD:
This pair is still an attractive long on dips, in particular dips below 1.08. We are still targeting a move back into the teens before years end.
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