Weekly FX Forecast

Weekly FX Forecast

This weeks report, rather than focusing on our standard ‘swing
trades’ using intra-day time frames for the analysis, will highlight some pairs
that we feel offer good risk — reward based on their longer-term charts.  These
ideas should be viewed in the context of weeks rather than hours and days.

While we always try to trade within the
direction of the trend, there are simply times when anticipating reversals can
be a prudent move if you have substantiated technicals rather than some
‘feeling’ that something is overbought or oversold.  We are beginning to sense
this is the case with the dollar, although it may take time to play out.  We do,
however, feel rather confident that USD/CAD has begun a move that will see it
trace out a move towards lower levels.


Dollar Index:

Let’s preface the following comments/charts
with a healthy does of caution:

Trying to determine a counter-trend move is
like chasing jell-o on a plate, it is notoriously difficult to anticipate the
next move.  However, purely from a technical standpoint, the dollar appears
vulnerable to a short-term set-back.  Of course, unless there is a technical
breach, it would be risky to establish short-term counter trend trades against
the dollar presently

Key Technical Levels For The Week Ahead:

6.6060, 6.5346, 6.5080, 6.4563

.7581, .7558, .7481, .7423, .7347

.6870-85, .6685 (fib level going back to May 2004)        

Dollar Index:           
91, 90.07, 89.33

As always, feel free to send me your comments and questions.