GBP/USD
The cable exceeded our 1.96 target this past week but then did begin to pull back. Early this week we expect the market to continue to consolidate the gains made last week. We are building a bull flag that should point the way to a test of the old highs above 1.99. That test will likely come at the end of this week or early next week. Over all the sentiment is bullish so use pullbacks as buying opportunities.

EUR/USD
The Euro did push through the 1.3365 level we mentioned last week, but then it too began to correct. This market could pull back to 1.32 before staging another bounce. The trend in this pair is up so much like the cable, buy pullbacks within the trend. Target a move back to 1.35 by the end of next week.

USD/JPY
This pair has now created a wedge pattern. These wedge patterns often precede a directional breakout so look for a big move in this pair once we breakout. Buy stops above 118.35 and sell stops below 117.25 are the best way to catch whatever the direction the market goes. We are slightly biased to the downside but by placing both of the above orders we really don't have to care which direction it goes.

USD/CHF
The trend is still down and the market is testing the upper boundaries of the trend which should make for a good short entry point above 1.21. Target a move towards 1.19

AUD/USD
The Aussie continues to consolidate near the .80 level. We remain cautiously bullish. Long trades with stop and reverse orders below .80 are the way to be long this week. This market has seen a very solid rally and near term down side risk is beginning to exceed the upside potential. A move above .8060 signals that the up trend continues.

USD/CAD
This market really broke down as we expected last week and has now created a bear flag. This could point the way to a move to 1.14 in the near future. Maintain short positions with stops above 1.1640.

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.