As the Asian & European sessions have opened the week with prices moving in both directions as influenced more from last Friday's US Non farms payroll and numbers were much lower than most analyst have expected. Although, the reports we have been expecting was still bias to negative for the USD, we have remained bearish on the overall picture as far as the USD is concerned.
However, trailing the major pairs for positioning would not be our strategy. As an alternative trend following the cross rates would be a better choice as we have continued our bullish analysis and position trade particularly for the EURGBP, the AUDJPY and the EURCHF, not necessarily in this order. The arbitrary hedge strategy would be a combination trade with the USDCHF and the USDJPY as both currencies on a day to day / intraday basis do move contrary with each other and use them for short term trade opportunities. But the overall weekly directional trend for these two pairs is still in line with the USD trending lower.
However, trailing the major pairs for positioning would not be our strategy. As an alternative trend following the cross rates would be a better choice as we have continued our bullish analysis and position trade particularly for the EURGBP, the AUDJPY and the EURCHF, not necessarily in this order. The arbitrary hedge strategy would be a combination trade with the USDCHF and the USDJPY as both currencies on a day to day / intraday basis do move contrary with each other and use them for short term trade opportunities. But the overall weekly directional trend for these two pairs is still in line with the USD trending lower.
With that said, the primary strategy is still bullish for the EURGBP now at the 0.8330 levels from last weeks low of 0.8253. Looking at the candlestick bar and its cluster formation have indicated that the interpretation of a bullish spinning top have signaled a price reversal. Whenever the price attempts to move to 0.8380-90 and does penetrate the Fibonacci resistance fan trend line a new high will be in the making. A timeline would be seen in the next few days towards the release of the Consumer Price Index on Friday.
The same case scenario is applied with the AUDJPY and the AUDCHF. As both the USDJPY and USDCHF are reaching its lower band price which has been the basis of the support prices of 1.0340/45 and 84.75 levels respectively. Some analyst do speculate that these movements may well be in preparation of a USD rebound. True enough for them as most have seen the prices are on their oversold conditions prompting a relatively good correction in between before it resumes its down trend.
Good Luck and Happy Trading ahead!
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