My opinion hasn’t changed and I’m still looking to sell medium-term USD rallies in preparation for the next big greenback sell-off. Cable is still my trade of choice and without gloating too much, I do feel that I’ve been trading it well and picking the right levels (at least eventually 🙂 ).
We’ve been looking at the two ‘double’ formations in cable in recent times, the big double-bottom with a neckline at 1.5750 (see chart) and a possible double-top forming at 1.6260 (but it first needs to break back below 1.5900). I’m still anticipating a break below 1.5900 in the shortish-term (so intraday bears can look to sell rallies with stops cleanly above 1.6070) but I think the bearish break will fail at 1.5750 and that’s when the next big bull move will begin.
USD/JPY is way too hard to trade at the moment in my view so I’m leaving it completely alone. EUR/USD can be put in a similar basket; I’m quite bearish on some of the EUR crosses, EUR/GBP in particular, and we might well get an extended period of range trading in EUR/USD.
AUD/USD is a clear buy-dips trade in my view and any levels now near .9225/50 are the right place to be building medium-term longs for a test of parity in coming months.
On the day, USD bulls are in control of the short-term momentum and selling EUR/USD rallies looks like the most popular way of playing this sentiment. But be wary, there is strong support at 1.3460 which must be respected (see chart).