This week we have a lot of earnings being release here in the US. The markets have stabilized and it seems for now that the sky is no longer falling. We remain cautiously optimistic that this “recovery” will last. We continue to see the Dollar stabilize against all currencies except the Euro. We still expect to see the Euro challenge the 1.60 level before this blow off is over. This is a Macro change in trend in the Dollar and as such it will be very slow to complete and will throw off many conflicting signals along the way. Do not be fooled…the days of a free falling Dollar are behind us.

**Many of this week’s comments are similar to last week due to little changing since last Monday.

EUR/USD:
We are still looking for The Euro to retest the highs and frankly we are expecting a brief push through them grabbing headlines north of 1.60. That being said, we do not expect it to follow through and are looking to sell into the new highs rather than chase after them. The safest play would be to buy the 1.59 or 1.60 May or June puts on a push to new highs. Comments the same from last week as nothing has changed.

GBP/USD:
We hit very close to our 2.00 target and have now exited all of our long trades from last week. We are again looking to buy dips this week and if we dip back to or below 197.50, buy with both hands. We are again targeting a move to and ultimately through 2.00.

USD/CHF:
As we mentioned in last weeks issue we are buyers or major breaks below parity and this week is no exception. We are still buying dips at or below parity. We are not looking to trade this pair in directional swing trades, just intraday hit and run trading as overall direction in this pair is still sideways.

USD/JPY:
This pair took off last week and is on it’s way back above 105. We continue to be buyers of dips but only light buyers as the possibility of a quick 200+ point correction is high. We are keeping position size low on this pair due to the high probably for a correction.


AUD/USD:
We did get stopped out of our original shorts from last week. We are still selling into this rally with stops above .9513. We simply do not expect the market to break out to new highs. We are comfortable shorting over .9400 with the afore mentioned stop.