Overnight

Overnight and yesterday's action has left completed measured move rallies for the Euro and Cable so the move out of the range could be decisive.

I'm looking closely at the Swissy and Jappy as they start to move from this current consolidation.

Quite a move

The Cable chart here shows just how fast the downmove has been from the original signal on the 25th. Those who got on the move early Friday will be very pleased.

It's amazing how, after the event, pundits are calling the Dollar long now as if they had known all along. Today could be a consolidation day but I'm looking top see what the Yen will do following the Japanese elections.

Corrections today

After the excitement yesterday I'm watching for low risk corrections against yesterday's moves.

US Durable Goods Orders at 1.30pm and then New Home Sales at 3.00pm have market moving potential later today.

The bigger picture

Early risers will have got their longs in place to ride the US$ rally that kicked off at 7.00am this morning.

The daily charts show how extended the dollar short selling has been, and consequently, just how far this rally could run. As always take some profits along the way and never let a profit become a loss.

An MPR on the Jappy

There are exceptions to every rule and trades have to be taken on their merits so I've traded the Jappy long this morning despite the daily downtrend. The Multi Point Reversal at the possible end of a five wave decline on the daily got my interest.

Will or it or won't it play out to the target shown here? I have no idea except that it is a low risk trade and I have my stops to BE.

Trade with the trend

Cable continues its relentless rise this morning as the US$ shows no signs of strength.

The temptation is to look for reversals in the trend but a strategy of fighting the dominant trend seldom works out. However, traders need to be flexible and just take the signals that are given.

False break reversals

The early morning break outs for the Euro and Swiss have now reversed and Cable is back into the overnight range. These rapid reversals, or FBR's provide some amazing opportunites as the reversal usual catches the majority of players by suprise.

If this reversal follows through both the Swissy and Jappy have plenty of potential to unwind.

UK GDP figures at 9.30am today.

And the trend continues?

The charts this morning suggest the $US will continue its slide. Waiting now for decisive moves through the overnight ranges to confirm. The Dollar Index shows no immediate signs of reversal but it is very extended and in the region of lows going back to '95.

UK retail sales figures out at 9.30am this morning will closely watched as wil comments from Bernanke at 2.30pm.

Wed am

As the chart shows the morning move has been very civilised so far! Both the Swissy and Jappy rected smothly from the overnight range floor here allowing students of the MPR to put on low risk trades.

Thre further the US$ falls the more volatile it will become so corrections (that may become reversals) from the main trend will become more tradeable.

Day traders will be watching for UK reactions to the MPC minutes and Average Earnings index at 9.30am followed by CAD CPI and US Core CPI at 1.30pm. Then at 3.00pm Bernanke speaks!

Jappy & Swissy

The Euro sold off as Cable rallied strongly on the back of UK inflation numbers. Whilst the Swissy was the best performer out of the overnight range.

This was followed by a very clear take profit and reverse signal that also flagged up on the Jappy.

Midday update

The Kiwi trade from Aspen is working nicely and the main, dominant trend has reasserted itself with the continued US$ weakness.

We had some useful counter trend trades in Cable and the Euro earlier but I am now waiting to see how the market reacts to the 1.30pm Business Conditions Index following its fall last month.

Cable, Euro and Swissy have stopped their bull run for now and any increase in the index could see US$ strength.

Monday 16th July

Overnight ranges defined suggest continued US$ weakness is pausing with several opportunities here against that dominant trend.

CAD

This morning, after a some false breakouts from the overnight range, I'm looking at this potential saucer bottom on the USDCAD pair.

A double bottom on the daily shows just how far and fast the CAD has strengthened on the back of a strong economy helped by rising oil prices. This one has potential and I've placed a low risk trade that just may follow through.

Eco data today are Core US Reatil Sales at 1.30pm followed by the important Consumer Sentiment Index at 3.00pm. Both have the ability to substantially move the market so take care trading during those times.

Swissy reverses

The 1.30pm numbers were at first greated with a bear move on the US$, that rapidly reversed and the over sold $ could now be unwinding.

The earlier Swissy position is now reversed at 1.2022. The first trigger was the trend line break followed by a break of point 2 of the 1-2-3. Second chance to get in came with the pullback to 1.2020 and there may well be more low risk opportunities to come.

Overnight ranges

The range breakouts for Euro, Swissy and Jappy followed look set to continue so far this morning but Cable is not joining in. The Euro left a shooting star on the daily chart that might cause a falter as price approaches yesterdays high.

Main eco numbers out later are for the CAD and NZD.

Useful range

The overnight range was releatively wide on the majors that then set up several modest trades this morning. The Yen and Swissy had clear MPR patterns as did the Euro.

At 9.30am UK trade balance figures are limiting Cable moves right now but watch for activity either way if figures diverge from the -6.55 expected. Also CAD interest statement is due at 2.00pm and Ben Bernake speaks at 6.00pm.

Non Farm Payrolls Day

A day to take care! UK also has Industrial Production numbers at 9.30am and Canadian employment cahnge at noon. Each of these has the potential to cause rapid and possibly whipsawing moves.

On these major annoncement days I prefer to stand aside maybe taking a trade either well before or after the figures once the excitement settles down.

And this is the reversal

Just as suspected, Cable had no more upside despite confirmation of the rate increase today. This is a classic 'Buy the rumour, sell the fact' market prediction. Added to this were the false break reversal (FBR) and a multi point reversal (MPR).

My bet that $2.0202 would not be broken was hit by just one pip. I'm looking for further $US strength now over the days ahead.

UK Interest rate today

At noon we will know if the widely expected rate increase happens. I'll be watching the reaction as we may have a 'Buy the rumour sell the fact' reaction. I have a low cost fixed odds bet that Cable will stay below $2.02.

The Swissy is stuck between fibs right now, a rejection or break either way should give a good few pips.

USDCAD

This trade could be triggered tomorow. Technical evidence is stacking up for bull move in the USD against the CAD, on the daily a strong hammer has been followed by three inside harami candles that when resolved, up or down, could be the next major direction to follow.

I've just taken a low risk long trade from the 20 min chart.

US Dollar Index

Chart shows the gapping down that could be seen as an Island reversal with lower levels due. The alternative is to see the red line as a higher low from the 2005 low that is also picking up support from the 1995 lows.

Either could happen from here but the bull case could develop quite rapidly, particularly as the majors, Euro, SWissy and Cable are looking very overstretched right now.

July 4th

The Euro and Cable have both broken out this morning but the Yen and Swissy are not taking part, just remaining within the overnight range.

I'm currently watching the Swissy closely following its mini false break followed by a immediate reversal back into the trading range.

US Markets are closed today and no numbers of any consequence expected so major moves are unlikely later in the day.

And they went too far

Spoilt for choice this morning using the overnight channel trade. The Swissy has broken out of this saucer bottom and Cable and Euro are performing well after all three became overextended against the US$.

The Yen is a little more reticent but still has potential.

Euro/Swissy

A continuation from Friday. At 7.00am a further short was triggered for this potential multi day trade.

UK and US manufacturing figures out at 9.30am and 3.00pm today, US most likely to be a market mover.