Written by Derek Frey
Tuesday, July 21st, 2009
We have seen a prolonged distributions / short squeeze last week and expect it to spill over into this week. That being said we are happy to short the S&P above 950 this week. We are still buying dollars on dips as we have successfully now all summer. We are excited to see support tested on the Dollar index and hope we see it broken at least a little bit so we can buy more. We have really had a lot of great ranges to trade within so far this summer. We are now up over 800 pips for the month in my trading room.
EUR/USD:
We remain short this pair and are still targeting a move back into the mid 1.30’s by end of summer. Selling rallies above 1.42 should be good entry points.
GBP/USD:
This pair remains volatile and lots of fun to trade. We are looking to sell rallies near 1.65 this week and expecting the lower 1.60’s to be tested by end of week.
USD/CHF:
This pair saw a nice breakdown and we are now long from just below 107 and loosing for a move back towards the 110 level.
USD/JPY:
We are still looking for this pair to track stocks lower in the weeks ahead so our bias remains to sell rallies and focus on managing risk on every trade every day without fail.
AUD/USD:
We are still selling rallies here as well and I know this sounds nuts and I may be wrong but the odds of a further advance are very low in the near term so I am happy to remain short.
USD/CAD:
Canadian continues the charge back towards parity I have mentioned in prior issues. I am now looking to buy dips near the 1.10 level this week. This is really a dead cat bounce trade but risk reward is good.
