GBP/USD
The cable has been one of the strongest currencies against the dollar in recent months due to unexpected rate increases and strong economic growth. The U.K housing market has also given the BOE justification to elevate the cost of borrowing, though the next round of data coming out tomorrow should shed some more light on any future policy decisions. That being said, the cable is still in a pronounced uptrend so look for a reversal off of strong support to enter a long term position trade while managing your risk.

EUR/USD
My outlook for the Euro Zone continues to be upbeat. Strong growth in both Germany and France, coupled with continued M & A activity have kept the ECB focused on containing inflationary pressures. In recent weeks the Euro has pulled back from its mutli- year highs though strong growth prospects should keep the long term uptrend intact. As with the other major pairs, tomorrows data releases are going to be the focus of any major move. Data that suggests a more pronounced slowdown in the U.S economy would help this pair find support near 134.20. On the other hand, an increase in U.S inflationary pressures or a greater than expected increase in job growth could pressure this pair, testing support near 132.90. Considering that some of the data could be conflicting, it is important for the investor to keep both the long and short term trends in perspective. The long term advance of the Euro should continue, perhaps rallying above 1.40 by the end of the year, but higher rate expectations in the U.S could temper its advance in the short term.

USD/JPY
Japan's recent unemployment figure came in at 3.8%, the first reading below 4% since '98. Combine that with higher than expected consumer spending, and it appears the 2nd largest economy is actually sustaining its long awaited economic turnaround. Not quite convinced? The jobless rate among younger workers is also on the decline as businesses are begriming to hire based on expectations of accelerating growth in corporate sector. Add to that, upward pricing pressure from strength in the Tokyo real estate market, and the BOJ has more than enough justification to increase rates from .5 to .75% this summer. Furthermore, if the Yen starts to gain some momentum, unwinding carry trades could exacerbate its climb, though until the interest rate differential tightens considerably it will continue to favor borrowing the yen to finance higher yielding investments,

USD/CHF
This pair has been consolidating for the last few weeks and is now close to support at 1.2230. Strong resistance between 1.2350 & 1.24 and any longs that bought into the recent bull flag formation should consider taking profits if the dollar can rally to those levels. Longer term this pair is in midst of a considerable consolidation that could produce a significant move if and when a break does finally occur.

AUD/USD
The Aussie continues to benefit from strength in commodities and a favorable domestic business environment. An increase in exports coupled with a decrease in imports has once again strengthened the trade deficit and keeps the economy growing steadily. In the short term interest rates expectations are relatively stable, though if the domestic credit market continues to expand the RBA will likely increase rates in an effort to tighten the reigns a bit, strengthening this pair in the long term.

USD/CAD
This pair's recent weakness can be attributed to two factors, a rebound in the price of crude oil, and the Bank of Canada's bias towards raising interest rates to curb inflationary expectations. Even though the USD/CAD has experienced quite an impressive decline over the last few months, the possibility of a bounce becomes more likely the longer the market goes without some type of consolidation or correction. Shorts should be trailing stops to lock in good gains, and nimble traders might even look for a good entry point on the long side.

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.