This week we have the all important FOMC meeting on Tuesday. This meeting will set the tone for the remainder of the week if not month. Most people feel that .25 of a point is a sure thing. Even if the FOMC delivers what the market is now asking for, we feel the market will react negatively. We see the Dollar firming even in the face of a rate cut.

Europe
Euro, Pound, Swiss Franc

EUR/USD:

This pair should continue to trade in a lightly higher to sideways fashion this week. We see the market establishing a new range between 1.40 and 1.38 in the week ahead.

GBP/USD:

The cable continues to pullback. We see support near the 1.99 handle holding this week and by the end of the month we see this market making a dramatic turn back up to test the highs just above 2.06.

USD/CHF:

The Swissy spent last week consolidating the recent break down. We do not see this market falling below 1.18 in the near term. We are likely to see a continued consolidation with a slight upward bias.

Asia
Yen, Australian Dollar
USD/JPY:

This pair is fighting with the daily trend line resistance level near the 115 level. If this market can break out and test the 115.55 level then we could see a bounce to 118. If on the other hand the Resistance level holds then we see this market continuing to drift sideways between 113 and 115.

AUD/USD:

This pair pushed up through last weeks target and continues to look strong. We have, however, completed a 62% Fibonacci retracement bounce from the recent highs over .8800. This could and should slow this bounce down. We feel that the most upside we will see this week is a .8600 if it manages to rally at all.

North America
Canadian
USD/CAD:

Last week we correctly predicted that this pair would test the old lows which we have now seen. This week we see the market rallying back up to at least the 1.04 handle. We will see this pair hit par but not in the very near term.

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.