This week we are looking squarely at the summer doldrums. Markets are drifting more than anything else. We do not expect any abrupt change interest rate policy out of any major Central Bank anytime soon, so we do feel that many markets are currently a bit out of step with that idea. That presents us with a number of opportunities this week. While many markets have expanded their respective ranges we do not expect immediate follow through in most cases. So our overall plan for the week is to fade many of the moves we saw last week as those extreme levels are tested again.
EUR/USD:
We are buyers of dips this week. We would prefer to buy closer to 1.54 but will buy whatever dips come with stops starting out below last weeks lows.
GBP/USD:
We are also buyers of dips in this pair this week. We would prefer to buy below 195.55 but here too we will take whatever dips we get. Stops are also below last weeks lows.
USD/CHF:
This pair is a little less clear. We are biased to selling rallies but we our confidence is not as high so we are keeping position size below 50% on this pair this week. We are sellers above 1.0489 with stops above 1.0555.
USD/JPY:
This pair has held up better than most through the last week. We however do not see follow through and remain sellers above 108 with stops above 108.89.
AUD/USD:
This pair came in nicely and we have covered the short mentioned last week. We are now looking for a near term bounce to sell into again but we could see a sizable bounce so we will be patient in the first part of the week.
USD/CAD:
This pair has stayed near the upper extreme of its range for longer than expected. In that time, however, it has been unable to push through and here too we are looking to fade these tests above 1.0255 with stops above 1.0355. We are ultimately looking to retest parity though not necessarily this week.
