Forex for the week of July 28, 2014
The Forex markets were a bit active over the last week, as the Euro finally broke down. The EUR/USD breaking below 1.35 is in fact a significant selling opportunity, as the market continues to show that the Euro is in a bit of distress. However, the problem with the Euro is that it never sells off too much at any one particular time. Because of this, we feel that there will in fact be bounces from time to time, but at the end of the day we believe that the market continues to have significantly negative pressure on it, so we believe that selling the short-term rallies will be the way to go.
It should be noted that the other market which is made a significant move is the USD/CAD pair. Breaking above the 1.08 level is the significant move, and the fact that the uptrend line that has been so strong for so long has held as support yet again certainly helps the idea of this market continuing to the upside. The move above 1.08 should send this market looking for the 1.10 level given enough time, and we believe that the market should continue to go higher than that, perhaps of the 1.13 level. However, keep in mind that this is a market that tends to be choppy at best, and will go sideways for long periods of time before making sudden impulsive moves.
That being said, we feel that going long of the USD/CAD pair is probably the best move right now. This probably signifies that there is more faith in the US economy in general, and as a result we believe that this market should continue to go much higher. It is not until we break down below the uptrend line below, and perhaps the 1.06 handle that we would consider selling this market.
Mon – US Pending Home Sales
Tues – US Consumer Confidence
Weds – ADP Non-Farm Employment Change, US Advance GDP, FMOC Statement
Thurs – China Manufacturing PMI, AUD PPI, China HSBC Final Manufacturing PMI
Fri – US Non-Farm Payroll