Forex Forecast - June 20, 2014

Note:  the Intra-Day FX Forecast highlights price direction and likely price targets/stops designed for traders looking at trading opportunities over the next several hours. These are not official trade recommendations, merely guidelines and forecasts

Good morning traders. If you have spent any amount of time in the markets you know there are 2 distinct camps of traders:

1. Those that accept what the market provides and adapt accordingly.
2. Those that get frustrated when there is not non-stop action or trades that do not work the minute they are placed

The later group far outnumbers the former - that is a simple fact and provides a constant challenge/entertainment for operations like mine.  Let's look at the current market environment.

• Slow and choppy price action.  Moves are measured over many hours and don't always align themselves with your/our view.
• Finding trades requires a bit more insight and patience.

For the 'casino type' traders they are going bonkers in here - there is zero instant gratification. However, from my perspective, I am quite content and actually find the current environment enjoyable.  If we review the last 6+ trades over the last few weeks they have all required us to pick our spots and let the market confirm/refute the analysis.  Average duration of trades is higher (+30 hours) and we are capturing large moves versus micro-managing trades.

Personally, that is a far more efficient way to trade and puts us in a position to achieve bigger gains versus micro-managing trades and thinking we can call each and every turn in the markets.  That is simply a delusional mindset.  At best we can get a good sense of price areas that represent solid trading opportunities - to forecast too much beyond that is an exercise in coin tosses.

My point is simple.  Different market conditions require different approaches.  The current environment requires patience and what I think we are all seeing is that we are capturing larger moves with less effort.  Isn't that the ultimate goal anyway's?  Work smart; not hard.

North American Short-Term Outlook:

• Dollar Index (DXC):  Neutral no change: I do not have a feel at all in here for DXC.  No need to impose my will on something that is choppy and sideways.
• EUR/CAD:  Neutral  to Bearish a very nice break lower overnight and that sets up up to sell rallies.  The trend overall is clearly down so selling rallies is a low risk approach.  Stay tuned for specific levels to consider selling into.
• EUR/GBP: Bearish we have been short for a few days now and there is no need to change the outlook.  Prices are moving in our forecast direction.
• EUR/AUD: Bearish we have been short this cross for a few days and added to it last night to improve our overall entry point.  Prices continue to be poised for lower levels.

Dave