I Think About What Could Happen If I Am Not Selective

D. Floyd Scandinavian Capital Markets

Good Day Traders.

While there is certainly ample price movement, it is not terribly easy or clear to forecast at present. And that's OK; recognizing that is part of being a successful trader. We should be participating when we feel we have an edge.

Right now, USD pairs are unclear with the exception of AUD/USD.
Where I see an edge is latching on to trades that will take a 'risk-on' bias tied to the S&P 500. My go-to FX cross for this is CAD/JPY.
Additionally, we might want to look at the extreme moves seen in GBP of late and consider fading it. In this case, longs in EUR/GBP

AUD/USD has completed a 3-wave correction off the lows (I suggested closing longs on Friday at the forecast target of .6800'ish - prices are now 45 pips lower). Additionally, copper prices look vulnerable to lower levels as well, thus I am expecting AUD/USD to take out the recent lows at .6710

S&P's poised for another push higher after this corrective move lower is complete. I expect CAD/JPY to follow along.

Mean reversion is what I see in EUR/GBP. You could also make the case, as I did on Friday, that GBP/USD is due for a move lower based on the same exact rationale.

Dave

Author

D. Floyd

Scandinavian Capital Markets

A native of Lancaster, Massachusetts, David earned a BS in Economics from Northeastern University in Boston and landed his first gig in the trading industry in 1993 when he joined the fixed income & FX desk of Standard Chartered Bank.

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