Sellers of Dollars on Rallies
We have a lot of reports coming out this week with CPI and PPI likely to have the most impact, and of course we end the week with a BOJ meeting. So we expect report and news driven volatility to increase this week which should provide many large opportunities on both sides of the market. We remain sellers of Dollars on rallies.
EUR/USD:
Euro Rally
This pair has held its lows. We continue to expect those lows to hold and remain buyers of dips this week. We do see more slowdown in the global economy, however much of the forthcoming bad news is already priced in and at this point anything less than the worst case scenario should rally the Euro.
GBP/USD:
Favoring Cable Dips
This pair gave us a bigger dip to buy into than we expected but you take what the market gives you. We were clearly a bit premature in calling the turn in the cable but stand by that call this week and continue to favor buying dips. We do expect last weeks lows to hold this week and are using those lows as stops.
USD/CHF:
A Signal For a Turn in the Dollar
This pair did push above 119 as we warned last week. We remain above that level going into this week and are now looking to sell rallies to or through 120. We continue to look to this pair to signal the more macro turn in the Dollar. The Fed. continues to print more and more currency, further sealing our fate.
USD/JPY:
Following the Bouncing Stocks
This pair continues to be joined at the hip with the S&P 500. Near term we expect stocks to bounce so this pair will follow. We are also buying dips in this pair targeting moves back to and through 100 this week.
AUD/USD:
Watching the Daily Charts
Crude Oil did fall a bit more but the Aussi managed to hold its lows. We continue to be buyers of dips here as well and read the daily charts as a potential head and shoulders formation, so long as the lows near.60 hold.
USD/CAD:
Lower Crude Prices Welcomed
This pair continues to see major spikes. As mentioned above Crude oil continues to struggle to find support. We do expect it to find support and begin to bounce, even in just the dead cat sense of the word, very soon. Don’t get me wrong, we welcome the lower crude prices, we just do not expect them to stay this low for very long. We are sellers of rallies in this pair this week especially any spikes near 125. �
