Currency Update – 5 Trades Correct Last Week, What Does This Week Hold

With our currency update last week we had some great trades and while we were right, we also know that if we were wrong, our risk was small for all trades entered.
We have had some fantastic profits last week but that’s the past, let’s look at the currencies this week and what we think will happen.
Our view last week was the longer term trend in the dollar was down and we would see this continue after, what was a good correction to the upside and we were proved correct.
As we said last week always look at the weekly chart to get the overall trend and the daily chart to time your entry. Let’s look at the majors and what lays in store this week and roundup last weeks action.
US Dollar Index
The correction ended dramatically and the dollar index is falling towards its lows. The double bottom at the lows is the target and a decisive break of these will see further weakness.
Traders should focus on getting in on this move on a bounce to the mid Bollinger band or a punch through the lows and a breakout to the downside. This market looks very weak so this is the way to focus.
British Pound
All trends are up hold longs. No entry at current levels as stochastics look very over bought. We will look at a dip to enter but for now no entry point, if you are in enjoy the ride.
Euro
A great move up last week. All trends are up and an advance to the highs is on after the currency punched through the mid Bollinger band. a Break of the highs will see a far bigger advance. Again same as pound no entry.
Yen
This currency long term trend is down (in contrast to the ones above on the weekly chart) and we have had a strong correction up to the 8800 level, this is the mid Bollinger band on the daily chart and also resistance on the weekly chart and if prices stall here we should see the yen retreat but odds are not clear just yet, what will happen.
If the yen cannot move strongly early next week look for a retreat back to the lows but wait for confirmation and a downturn on the stochastics ie a crossing with bearish divergence.
The commodity currencies
We all know that the commodity markets are booming and the Canadian and Australian Dollar can help you take advantage.
This week we will also look at the Australian Dollar as well as the Canadian dollar we looked at last week
Australian Dollar
The weekly chart shows a close over the mid bollnger band and the daily chart shows strength buy dip to the mid bollinger band or breakoput of the 7600 level. This currency should become a big bull market in the near future.
Canadian dollar
The lager of the all the positions we looked at last week. We are long but we could have a test of our entry at the double or triple bottom after Friday’s action. If you are looking to get in this is the area to target at present. The long term trend is firmly up on the weekly chart and this market should remain bullish for the foreseeable future.