Markets have been consolidating to start the week in anticipation of election results and interest rate statements during a busy fundamental week. Low volume has driven most pairs into tightening consolidation, but we will look to these prices as indicators to trigger opportunities and trading levels…

USDCAD – The 38.2% retracement level of the 01/2001-11/2007 move down should be tested at 1.1780. If this level is breached(1.1750 is confirmation), we will look to sell toward 1.1500.

EURCAD – A break of 1.4700 could send this pair spiraling into the early 1.40 levels. Look to sell with large stop-losses to account for EURCAD whipsawing.

NZDUSD – The pair has held under the 23.6% level of the 03/2008-10/2008 move down. A break of .6030 will send our outlook to bullish NZDUSD.

AUDUSD – This pair has been channeling down and the Aussie central bank is expected to cut rates today which might indicate a bearish outlook. However, we believe the rate cut has been priced in and we will look to buy AUDUSD past .6900. If AUDUSD moves below .6500, our outlook will shift to bearish.

GBPUSD – Falling below the 61.8% retracement of 10/27/2008-10/30/2008, the GBPUSD sell stop was triggered for IntegrityFX Plus signals. It has since retraced to 1.5840 and above 1.5900 we will be flat GBPUSD and await a fundamental-driven direction. However, we expect the sentiment for another Sterling rate decision to help pull down the GBP lower as they should be very dovish.

EURUSD – The EURUSD has fallen from the recent highs in the 1.30’s and we expect ranging between 1.20-1.30 over the next couple of weeks as oil continues to stay around the mid 60’s. Keep an eye on the cost per barrel and a break to the upside should push the EURUSD higher and a break into the 50’s could send the EURUSD spiraling toward new lows.

USDJPY – The Yen-based pairs have been jumping back and forth over the past few days and we are inclined to be square the carry trade at this time. However, as mentioned in our market outlook, the VIX has been a strong indicator for market sentiment and under 50 is a good sign for carry trade buying and above 60 should send the USDJPY and other JPY-quoted pairs much lower.

GBPJPY – VIX below 50 and GBPJPY above the 100 SMA on H4 gives us a bullish signal.

John Rowa
Executive Director of Trading
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