The holiday season is now behind us and this week will be the first week of 2008 that is back to business as usual. That means that volume will finally get back to normal levels and volatility, while still high relative to the past, should begin to contract from the extreme holiday levels. We see signs of possible Dollar strength this year but it will be hard to get a rally going in the Dollar with the expectation of more rate cuts to come in the near term. So we will cautiously buy dips in the Dollar for position trades while continuing to day trade with the trend.
EUR:
The Euro has been surprisingly strong these last few weeks. We do not see this pair breaking out over the old highs in the near term so we will continue to sell rallies. We are targeting a move back to 1.45 this week.
GBP:
The Cable has is trying to find and hold onto a bottom above the 1.96 level. We could see a final push down to about 1.95 but that should be it. We are turning from sellers to buyers this week. Keep the positions sizes low in this pair this week as it is likely to struggle with the turn.
CHF:
The Swissy really broke down over the holiday and in doing so is now very oversold. We are buyers below 1.11 with stops below 1.10 targeting a move back up to 1.14 later this month.
JPY:
The Yen has also seen a very big break down over the holiday and it to is very oversold. We are buyers below 109 with stops below 108 targeting a move to 112 by months end.
AUD:
The Ausi remains range bound between 86-88. We see this market continuing to trade inside of this range this week with a slight upward bias.
CAD:
After falling below parity the Cad has tried to bounce back above it but so far has failed to hold onto those rallies. We are sellers above parity with a target of .9600.
