The Underlying Fundamentals
For the first time in quite a while the U.S economic front was relatively quite, giving the market a bit of a breather. However, the international front was relatively busy with monetary policy meetings for both the ECB and The Bank of Australia. Somewhat unexpectedly, the ECB kept their interest rate unchanged in the face of extremely strong economic growth rates. The Euro Zoneââ,¬â"¢s inflationary outlook remains contained, though it will definitely be a highly anticipated number going forward. Next week, be on the lookout for PPI & CPI numbers from numerous countries.

EUR/USD
After consolidating for the last two weeks between 1.27 & 1.2775 this pair finally caught a bid and pushed up through 1.28. However, the market seemed to stall on Friday and by the end of the session had given back most of its gains. I still expect this pair to push higher although I think in order for us to truly see a breakout we need an economic catalyst. At this point I am on the sidelines and am watching support levels @ 1.28 and 1.27 for a bounce and would look to fade a push through 1.2940 with a tight stop and reverse.

GBP/USD
Late in the week this pair pushed up and through resistance @ 1.91 and pulled back to close the U.S. session right at that level. I am still favoring the long side of this pair and I added to my long Friday afternoon with a stop below 1.9158. If we break below that level I would look for support @ 1.8985 and the only upside resistance is 1.9175. Based on those levels the risk to reward on this pair is extremely attractive.

USD/JPY
The short trade I mentioned in last weeks newsletter worked perfectly, as the pair pushed up to 118.30 and then reversed. I spoke to several clients who were able to successfully trade that move and I always appreciate hearing from those clients that have been making money trading my recommendations. I am still favoring the short side of this pair and will continue to short any push towards 118.40 with a 30 pip stop. On the downside look for 116 to serve as support

USD/CHF
On Monday we had a quick bounce off of the trend line support I mentioned, and by Tuesday that trade had managed over 110pip profit in 2 days. The market then reversed off the 1.2575 resistance we targeted and on Friday we began a breakdown through the support @ 1.2450. I believe this pair may move lower if sellers can keep it below 1.24. Look to short a bounce towards 1.2420 with a 30 pip stop, targeting the support @ 1.2275 on the exit.

AUD/USD
After pushing all the way up to .7755 this pair stalled out and reversed, ending the week with a break below .7690. I am still bullish this pair in the long term, although I think we may continue to consolidate in the near future while this market digests the move from .74 all the way to .7750 in about a month. This pair has been a great example of how it can be beneficial to not trade the noise but to swing/position trade for some larger profits. I am looking to buy a bounce off .7575 or an unlikely break above .7775.

USD/CAD
I continue to look at the long side of this pair, though this past week was quite uneventful. However, the rather muted trade has produced a classic short term coil formation and I believe this could be the springboard for a push through 114. I am currently long from 112.95 and with my stop below 1.2960. I am looking to add to my position if we can push through 113.25.

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.