Written by Derek Frey
Monday, September 28th, 2009
The Dollar has clearly begun the turn I have been talking about for some time. We expect this to last much longer than most expect. Partly because the mob (a.k.a. the crowd) is not expecting it. Look for continued Dollar strength this week and use any major dips as buying opportunities. Sell stocks and commodities while buying Dollars NOW, or wish you had later.
EUR/USD:
This pair had been slower to roll over than some of the others but now that it has we expect to see it begin to play catch up. We continue to sell rallies here and are looking for a move below 1.40 in the 4th Quarter.
GBP/USD:
The cable continues to lead the way lower and is now well below the 1.60 handle. We expect a near term rally back up to that level and will use that to sell into. Bottom line here is simple, BOE has hung themselves and now we simply watch them die as they swing from the tree. Hate be so graphic but if the shoe fits.
USD/CHF:
This pair has been the slowest of the majors to acknowledge the turn. We see this pair as a solid buy near the 1.03 handle and are still looking for a move back up towards the 1.10 level before the year is out.
USD/JPY:
This pair is caught up in an emotional headline chasing tail spin and until the fools finish losing money chasing this thing I am happy to stand aside. That being said I would be looking for dips to buy into if I trade this pair at all.
AUD/USD:
This market is likely to prove to be on of the best shorts of all the majors as when we look back from the end of the 1st Quarter 2010. We are happy sellers of rallies above the .86 handle.
USD/CAD:
Early this week I would be a seller near the 1.10 level but as we dip I would look to cover those and reestablish some long trades below the 1.09 handle.
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