EURUSD traded higher on Friday but inside yesterday's range. On Thursday, the Euro posted a new all-time high, but quickly backed off as traders awaited an announcement from the Group of Seven meeting in Washington. The consensus going into the meeting was for a statement that no intervention was going to take place at this time. Another line of thinking had the G-7 issuing a statement supporting the Dollar. A third opinion was that the concern right now was with propping up the British Pound and not the Dollar. This indecision was largely the reason the Euro could not muster enough momentum to finish the week on a new high.

The interest rate differential is favoring a long EURUSD position. Until this spread narrows, stay with the uptrend. Some traders think the ECB left open the door for an interest rate cut later in the year. Two things have to happen before they will consider a cut. The first is a series of Euro Zone economic reports indicating an economic slowdown. The second, the credit crisis starts to hit Euro Zone backs. Up until now, the Euro Zone has been free from both of these negative fundamentals, however, with just about all of their trading partners suffering from one or both of these calamities, it only seems like a matter of time before the Euro Zone becomes exposed to the same financial turmoil.

The USDJPY and USDCHF fell against all of the major currencies to finish the week on the low end of the range. The weakness in GE stock triggered a sell-off in the major stock indices encouraging investors to reduce their holdings in risky assets. The main trend is down in the USDCHF. It turns up on a trade through 1.2016, but it is trading close enough to the last main bottom at .9871 to challenge it early next week. The USDJPY is in an uptrend. A move though 102.94 will accelerate the trade to the upside. Trading down through 98.56 turns the main trend down. The lack of fundamentals driving these markets makes them both vulnerable to stock market swings.

The focus in the Canadian Dollar shifted from commodities to the Canadian economy this week. For weeks, the USDCAD had been under pressure due to the strength in gold, crude and wheat. Even with a new all-time high in crude oil, the Loonie could not reverse the Dollar's uptrend. Traders are looking for another 25 bp cut in interest rates by the Bank of Canada. The thought is that the U.S. economic woes are spreading over the border and directly affecting the Canadian economy. This next rally could challenge 1.032. On the downside, a move through 1.01 turns the main trend down.

It was a dismal week for the GBPUSD. Although the pair did have a temporary short-covering rally after the Bank of England cut rates by 25 bp, it was not enough to turn the trend to up. The weakness in the Pound is expected to continue into next week as traders expect another round of interest cuts in June and July. A weak housing market and tight credit markets are expected to continue to put downside pressure on the Pound. There are rumors that comments from the G-7 may be specifically directed toward supporting the Pound. A trade through 1.964 should accelerate the trend to the downside.

The AUDUSD was firm all week as traders looked at commodities for direction. The trend is up with new support established at .9184. The next upside target is the 2008 high at .9496. Earlier in the year, the rally was being fueled by a series of interest rate hikes by the Royal Bank of Australia. The top was put in on comments that rate hikes would subside. This current rally appears to be yield-driven by perhaps hedge fund money as no solid fundamental news has come out to support this uptrend. Look for volatility to emerge as the pair nears the all-time high.

DISCLAIMER: Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. The value of currencies may fluctuate and investors may lose all or more than their original investments. Risks also include, but are not limited to, the potential for changing political and/or economic conditions that may substantially affect the price and/or liquidity of a currency. The impact of seasonal and geopolitical events is already factored into market prices. Prices in the underlying cash or physical markets do not necessarily move in tandem with futures and options prices. The leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds and such may work against you as well as for you. In no event should the content of this correspondence be construed as an express or implied promise or guarantee from B.I.G. Forex, LLC and Brewer Investment Group, LLC or its subsidiaries and/or affiliates that you will profit or that losses can or will be limited in any manner whatsoever. Loss-limiting strategies such as stop loss orders may not be effective because market conditions may make it impossible to execute such orders. Likewise, strategies using combinations of positions such as spread or straddle trades may be just as risky as simple long and short positions. Past results are no indication of future performance. Information contained in this correspondence is intended for informational purposes only and was obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.