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The Trader Advantage: Got Pips? Get Ready

Outside of Usd/Jpy, that has put in place two 1-Hour candles that cover 180 pips in the last two sessions, no pairs are breaking any previous session ranges on Friday. Euro has gained 30 pips, cable 90, aussie 90, cad 10, and swissy 20, on a day that forex valuations have obviously hit a sweet spot.

This does set up solid potential for next week trade, and will we be looking at two trades; long Usd/Jpy off a pull-back from 90.50, and long Aud/Usd off a pull-back from 0.9070.

Gbp looks ready to break higher, but is stuck in the ranges of the week. If it closes around 1.5100 we will have a good signal that market sentiment favors giving the pound some room to run. Usd/Cad is a mystery at the moment, and may offer a long-play that flies in the face of fundamental links for a while. Roll on next week, because these NFP Friday trading session is setting up great potential.

*Timing The Trade- The times to look for New position entries are 8pm (Asian Momentum), 2am (European Futures Move), and 7am (Chicago Reversal). Outside of those momentum-packed times traders will be intra-day trading with tight targets. The U.S. session has little forex momentum, outside of reversing whatever came before.

Dollar Index
The 4 hour trend is Neutral. Price action is dominated by U.S. employment and fiscal deficits, after the infamous NFP job reads. Failures at the dollar index swing point high at 81.50 previously lead to tests of 74.00 and 72.00, some 600 and 800 pips away from current valuations.

Global risk right now is dominated by the best-of-the-worst scenarios that are being played out daily around the daily red flag economic releases. Traders are left looking at near-term targets from a global market that is starting to print 4 hour chart reads that are not revealing too much. Momentum is weak. Favor a straddle (Long and Short near term plays).

S&P Futures
The 4 hour trend is Long across the global equity market. Equity trade is creating charts that would be at home on the drawing board of a theme park ride. These moves are all over the place, but are still managing to hold support. The lack of inter market leverage is playing havoc with the ability to buy and hold.

The 1125.00 area is likely to initially hold as support on S/P trade, with a move lower targeting 1115. Upside moves are to 1140. Momentum is strong. 12-month 96% correlation to Aud and Cad moves. Favor a straddle.

Crude Oil
The 4 hour trend is Long. Oil remains trading in the $81 area, which has been a swing point high in the last two weeks of trading. Oil can push higher from this area if helped by a weaker Usd and stronger equities, however, this is a major price point to deal with. Momentum is strong. 12-month 95% correlation to Aud and Cad moves. Favor a straddle.

Gold Bullion
The 4 hour trend is neutral. Gold had pushed above the 1125.00 resistance area, and held the re-test of that price point as support. Gold is being used as a hedge against risk tolerance levels. To the downside, the next important support area is at $1105.00. Momentum is flat. Favor a straddle.

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