The theme for this week continiues to be corrective bounce and consolidation. We see many of the pairs that started to bounce last week continuing to do so this week. At the same time though we do not see the Dollar index falling to new lows so that tells us not to buy into this dip for the long term. Instead we will be swing trading these moves with trailing stop and reverse orders.

Europe
Euro, Pound, Swiss Franc

EUR/USD:

Near term we see more upside in the week ahead for this pair. We could test the old highs but we do not expect to exceed them by much if any. We are targeting a move back up to the 1.38 level and then a consolidation.

GBP/USD:

The Cable is also still in rally mode and we are targeting a move back up to the 2.04 level, and it is not out of reason to then see a test of the recent highs sometime in September.

CHF/USD:

The best the Swissy could hope for is a bounce to the 1.22 level. That seems to be a bit of a long shot and frankly we expect this market to more or less drift sideways around the 1.20 level this week.

Asia
Yen, Australian Dollar
USD/JPY:

The Yen continues to bounce off of the massive sell off we had two weeks ago. We see this bounce carrying us all the way up to the 118-119 level before stalling. We still feel that this is a prolonged dead cat bounce and will look to buy puts once we reach our upside target.

AUD/USD:

The Ausi is also bouncing off of the same sell off that affected the Yen. We see this bounce also continuing until we reach the .8500 level at which point we would expect to see a consolidation.

North America
Canadian
USD/CAD:

This market is expected to drift sideways to lower over the coming week but the magnitude of the move should be small and therefore we will focus on other markets for opportunities this week.

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.