Written by Derek Frey
Tuesday, November 3rd, 2009
The Dollar has clearly begun the turn higher I have been writing about for months. We are looking for this to be a rather violent turn still. While we remain long term Dollar bears, in the near to medium term we want to continue buying weakness in Dollars. Buy low and sell high is supposed to be how this works. And it does if you just have the courage to buy when no one else wants to. Trades, when put on, if they are good, should feel very uncomfortable at first. Learn to find comfort in other peoples uncomfort.
EUR/USD:
This pair has seen a nice pullback from 1.50 but we could still see some spikes back up to and even through those levels in the near term but either way we want to sell strength.
GBP/USD:
This pair remains very volatile and is likely to remain so as global traders shift risk away from reckless central banks that engaged in foolish “quantitative easing”(talk about a euphemism!)
USD/CHF:
Parity remains a solid support level at this time and near term we do expect it to hold.
We are looking to buy dips back towards parity over the next few weeks.
USD/JPY:
This pair continues to see wild volatility as the shift from using Yen for carry trades to Dollars continues. This pair and other crosses with the Yen will continue to see extreme periods of bi polar activity as global risk shifts away from Yen and towards Dollars.
AUD/USD:
This pair has poked its head near the .90 level and we are happy sellers near that area. We still see commodities as a sell this quarter and into 2010. Near term we will begin to use spikes as short entries. Same comments as last issue and the song remains the same.
USD/CAD:
This pair has led the charge lower in the Dollar, and is now leading the charge back up. We continue to favor buying weakness here as it has paid off nicely so far.
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