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Weekly Trade Plans on the majors show separation between the pairs; cable and aussie long, euro, swissy and cad to range trade, and buyers coming into the yen. All-in-all a mixed picture to start the week, but an easy choice in what to chose if the markets move one way or the other against the dollar. There is a big week of economics ahead, and there will be big moves as a consequence, with the currency/equity link possibly tested for a move instead to currency/regional growth valuations.
- Dollar weakness = Buy aussie.
- Dollar strength = Buy Usd/Jpy or Usd/Cad.
The major pairs are showing that a consolidation of the recent moves may take place, but the pound has not yet gone that way; the Gbp/Usd pair put on 480 pips last week, four times the average on the major pairs. Outside of cable and aussie the weekly pip count was in double digits on the other pairs, and that indicates a pull-back may be coming on cable. The other pairs do not look strong enough to catch up, and that invariably leads to a period of re-alignment.