By: Christopher Lewis
GBP/USD
The cable pair has formed a second shooting star in a row this previous week as it continues to struggle above the 1.57 mark. The 1.53 level below has been massive support, and we think that is where the real battle is. The breaking of this level would be a confirmation of a massive head and shoulders. The result would be a move down to 1.43 possibly. Because of the last two weeks forming the shooting stars, we think rallies will continue to be sold.
EUR/USD
The EUR/USD had its big day on Friday, as the EU summit finally came and went. The solution produced great stock market returns, but the currency markets don’t seem quite as impressed by it. The market continues to be a “sell the rallies” type of market and it looks like the grind lower should continue. The buying of this pair is going to be risky, as there are plenty of headline risks out there, including possible downgrades of 15 countries by S&P.
USD/CAD
USD/CAD had a back and forth week as traders are fighting it out in the oil markets. The 1.10 level should continue to serve as support in this pair, and we think that the path of least resistance is up, albeit somewhat limited. This pair will more than likely stay within the 1.03 and parity levels this coming week.
USD/JPY
The USD/JPY pair fell over the past week, and continues to grind lower overall. The market seems “stuck” at the moment, and with the Bank of Japan willing to get involved at the 76 area, this pair should continue to stay somewhat buoyant over time. However, rallies can be sold as long as we stay under the 80 level. The breaking out above the 80 mark could be a massively bullish signal, but to be honest – it will take something special to see that.
USD/CHF
The USD/CHF pair rose a bit during the previous week, but continues to struggle to get above the 0.93 level. The market seems intent on fighting it out at that level, but the Franc is presently being worked against by the Swiss National Bank. The Dollar continues to be the “safe haven’ trade, and we think over time this will be the thing that pushes this pair higher. However, we need to see a daily close above that 0.93 level.
