- Cable looks to be offering the clearest sell signal with resistance levels now likely to be very firm between 1.6850/80 in a market that is already very long at elevated levels. I think we could see a healthy retracement towards 1.65 perhaps, presuming of course that we don’t get any excessively bad data out of the US;
- USD/CHF is more of a technical trade with a double bottom forming on the daily chart;
- EUR/USD also seems to have turned a corner in regards to market sentiment. Sovereign and real money bids have reportedly dried up to a large degree ahead of the ECB and hedge funds are more willing to sell rallies.
I think the USD bulls should stick to the above pairs.
Elsewhere, USD/JPY is tied in by massive flows on either side of its range, USD/CAD will struggle to rally with the market unwinding large CAD short positions on the crosses, and both the AUD and NZD are still benefitting from significant demand out of China.