General Market Comments:
This week we have little in the way of major reports. The Dollar is trying to hold onto its bid but we see signs that the Dollar may pullback to retest prior lows in the near term. In a macro sense the Dollar continues to put in a bottom but on a micro level, specifically the Eur/Usd, is still struggling to turn. Look for the market to break free from the ranges we have been stuck in for the past few weeks.
Europe
Euro, Pound, Swiss Franc
EUR/USD:
This pair is a buy on dips this week as we see strong potential for this pair to break out above 1.56 this week. If we see that then look for a retest of the 1.60 level by early June. This pair honestly does not know what to do with itself and we will therefore see range expansion until the market gets a solid footing under itself. We will be cautious buyers of dips this week.
GBP/USD:
The cable remains a buy on dips. We are still targeting a move back up to 1.9750 before this is rally completes. We are looking for this rally to be fast and furious and may fail to hold up in the short run so we will be trailing stops on any longs taken.
USD/CHF:
This pair remains a sell on rallies. Overall we see this pair having potential to see range expansion to the downside. We do not expect huge moves this week but we could see this pair slide to support at 1.03 – 1.02. Any sells above 1.0555 should fair well with stops above the May highs.
ASIA
Yen, Australian Dollar
USD/JPY:
We are still sellers of rallies here as well and could see a bit of downside range expansion but overall we are expecting this pair to more or less maintain range between 103-106.
AUD/USD:
This pair is attempting to break out and begin the run towards parity. We did cover our shorts at our target from last week and are now flat. We will attempt a small short trade above .9534 with stops above .9589. We do not have confidence that this pair will follow through to the upside so we will not chase the breakout but at the same time we do not have a huge amount of confidence that it will fail to follow through so any trades we take regardless of direction will be small in size.
North America
Canadian
USD/CAD:
This pair broke through parity as we suggested it would in past issues. We expect to see this pair continue to slowly trend lower and continue to be sellers of rallies. We are targeting a move to about .9800 before this sell off completes. We are not looking for a major directional move just simply retesting the lower end of a longer term range.
