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Long Dollars, But Overbought: Five out of Six dollar index drivers are in short mode, and all are Oversold. Therefore favor the long side of Usd trade, with a slight reduction in lot size. But, bear in mind, we are due a technical reversal of Usd buying if equity markets find support, the question is whether that will be strong enough to get the Trend back long on the global market drivers. As things stand in Monday trade, the dollar will be bid higher if global markets continue to sell oil and equities.
Mixed Up Majors: Cable just joined aussie as the latest pairs to start to fold under Usd buying pressure, something that is not soon reversed will draw in the next round of selling that could test 1.5750. We stated last week that the market had looked capable of sending Gbp/Usd long, if equity markets held in the green, but now that the selling has intensified we may just have the opposite test; pivotal times. This is a mixed up read on trend and momentum, and sends a warning that near-term targets need to be employed. It is rare to get such a varying major pair outlook.
Cable trade plan numbers are in play from 1.6120. but be very aware that it is moving on its own at the moment in regard to breaking new ground. Euro will be the next one to hit, if 1.3900 gets a test as support, but again, be aware that just below here we have seen market bids that have held as support; tight targets that get banked are the order of the day.
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