Good Day everyone,

One thing that you can guarantee yourselves is that as of today I am on break until September 1st, so that means that from now until then, there will be some increased volatility and no doubt in my mind that it will probably be 100% directional as well.

I am looking at charts and the USD is really picking up strength. The pressure charts have never looked so directional for months.

I go on vacation with two live FUNDAMENTAL trades in play: -

GBP/NZD long currently +82 pips
GBP/AUD long currently -45 pips
(Both of these trades are automatically hedged at -100 pips)

I know quite a lot of you are already have wound down your trading activity and some of you are stopping today like myself. I must admit when you look at charts there are some interesting levels to mention just in case you are trading thru the summer.

<span style="text-decoration: underline;"><strong>EUR/USD:</strong></span> Key support at 1.3370. If this level breaks I think that the flag pattern measured move to 1.3250 will be hit. At that level we will be well oversold with this currency if it moves as fast as I think it will and therefore at 1.3250 we may see a bounce.

<span style="text-decoration: underline;"><strong>GBP/USD:</strong></span><strong> </strong> Like the EUR/USD they key support in cable lies not from present levels at 1.6850. Personally, I think that this pair is no longer bullish, in fact I see a movie lower now towards 1.6500.

<span style="text-decoration: underline;"><strong>EUR/GBP:</strong></span> This pair I think is in danger of a squeeze higher given what my thoughts are if the EUR/USD and GBP/USD both fall quite aggressively. We are in a daily bearish wedge and most times the reversal from this pattern is strong. We could see an upside move from 0.7900 towards 0.8000 quite easily and swiftly.

<span style="text-decoration: underline;"><strong>AUD/USD</strong></span>: We continue to fall and the next target is around 0.9250.

<span style="text-decoration: underline;"><strong>NZD/USD:</strong></span> The  cross rate effect of the AUD/NZD is preventing this pair from continuing its fall. I think that should the NZD/USD drop below 0.8460 there are big stopping points until 0.8000.

<span style="text-decoration: underline;"><strong>AUD/NZD</strong></span>: This pair is pulling back and influencing both the AUD/USD and NZD/USD. To me it looks like we are going to get a GAP FILL to 1.0850. This would be a reasonable level to get long.

<span style="text-decoration: underline;"><strong>USD/CAD:</strong></span>  I think that should this pair move above 1.0955. We should be above 1.1000 quite quickly. Below 1.0850 and it becomes bearish.

<span style="text-decoration: underline;"><strong>USD/CHF:</strong></span>  If the EUR/USD falls this pair could be set up for a move towards 0.9400. 0.9250 is the major hurdle on the way.

&nbsp;

I know that the above is  future determined by USD strength and EUR failure that is what I am looking at the moment. European markets are under pressure especially the DAX, there are support levels on the verge of giving way. Should this happen this will affect U.S. equities and place more strength on the USD.

NFP will be so critical for the above to happen.

I also think that the commodity crosses look  like they want to move higher: - EUR/AUD, GBP/AUD, EUR/NZD, GBP/NZD, EUR/CAD and GBP/CAD.

The backdrop is though we are surrounded by very slow moving markets with false breakouts / breakdowns, so if anything tempts you to stay trading make it a small position with a wide stop.

Have fun for the next few weeks but try not to get suckered into trades.

I will be on twitter here and there throughout the summer and still open for emails although I may be out and about so be patient do not expect a fast response.

Scott

&nbsp;