After a long day of high expectations with the long Easter Holiday weekend finally coming to a close, the markets still appear locked. Although stocks were down, the USD continued to weaken overall. Terrible news on the USD front this AM was a setup for a second look at the bottom possibly once again coming near in the markets. My main thoughts are on how the market will adapt to the weakness of the USD after all these months of the “flight to safety” of the USD. Clearly, the past several months have proven to be very strong for the USD, but if risk appetite increases, how will the forex market react to all the built-in pricing of a strong USD? Are we in store for some huge whips northward on the USD majors? Time will tell of course, but for me, I am sticking with going long on the strongest pairs and short on the weakest. We had a nice long GBPUSD trade earlier and are now short AUDUSD. Even though the AUDUSD is a strong pair in the short term, all good things must eventually retrace at some point!
Take care and make it a great week!
Jason Gospodarek
www.FastPips.com
