Last week, I stayed on the sidelines as I did not see a favorable setup on my favorite pairs.
Looks like another week wherein my patience will be tested. AUD/USD, NZD/USD, EUR/USD and BP/USD are all going through a correction.
The German economy printed an economic growth number that showed t was slowing down - good news and bad news. Bad news for the Euro in the short-term, which is probably the cue for traders to dump their Euros and take-in profits causing the correction currently underway. The good news is that Europe's big boy is still growing. That, coupled with the relative silence in the Eurozone on sovereign debt issues, would be enough to set the bullish tone for the Euro in the long-term. The 1.34 level seems to be a strong resistance level. Once the pair breaks that, I am looking to BUY.
AUD/USD and NZD/USD are both treading identical paths. I am looking to BUY these pairs once the corrections end and setups present themselves.
For the USD, I'm keeping an eye for what appears to be a looming battle over the US Debt ceiling in Washington. If another impasse persists, a wave of risk aversion could ensue and the corrections on the dollar pairs could continue.
The world eagerly awaits the BoJ policy statement this week. Shinzo Abe's government announced the much rumored fiscal stimulus package last week which sent the yen pairs through the roof. However, at least one Japanese minister publicly acknowledged that a weak yen would not be in the best interest of a Japanese economic recovery, dousing cold water on the JPY pairs. In the long-term, I believe that USD/JPY is headed upward - correction could happen this week. Looking to BUY into USD/JPY once correction ends.
