We continue to patiently wait for more strength in the dollar. As I have mentioned in past issues we are not looking for a macro change in trend but really just a dead cat bounce. We have seen the Dollar bounce already but it has so far been unable to follow through. We expect follow-through this week off either the CPI data to be released on Wednesday or Friday's G7 meeting.

Europe
Euro, Pound, Swiss Franc

EUR/USD:

The Euro pushed back up to test the old highs this past week. We have so far been unable to break through these highs and we see this market continuing to fail to break through in the near term. We are holding a short position from 1.4225 with stops above 1.4289.

GBP/USD:

The cable continues to drift sideways, building the bull flag I have mentioned in past issues. We need to see a breakout over 2.05 to get the bull running again. Once we move above that level we expect to see a push towards the 2.10 handle.

USD/CHF:

This pair spent the better part of last week consolidating. We continue to target a move to about the 1.20 level. We are long from 1.18 with stops below 1.1755.

Asia
Yen, Australian Dollar

USD/JPY:

This pair has been much calmer in the past week, as we expected it would be. We are looking to sell short on a push over 118, but at this time we are flat waiting for an entry signal.

AUD/USD:

The Ausi remains strong against the dollar but momentum has decreased dramatically and we continue to smell a top in the near term. As we mentioned last week do not chase this pair higher. Buy the dip when it comes but be careful not to do it too early as this pair has a tendency to stage fast breaks in trend that go deeper than expected.
 
North America
Canadian

USD/CAD:

We have been waiting patiently for a rally in this pair that seems not to come. Our models continue to call for a counter-trend move but with oil prices north of $85 it is difficult for this pair to get it together. We are long from 9737 with stops below 9689 and we are still targeting a move to 1.02 in the next few weeks.

Derek Frey is Head Trader at Odom & Frey Futures & Options.

Risk Disclaimer
Past performance is not indicative of future results. Trading futures and options is not suitable for everyone. There is a substantial risk of loss in trading futures and options.