Thank you for all the emails I received in response to the Straight Dollar post from yesterday. I will try to answer all them over next day or two. I’d like clarify a point here in regard to that article. It was not my intention to attempt to predict direction of USD if the future. For that other posts will be written, more specific to the task. My interest was more in putting in perspective what has been happening to our currency, in spite of official “stand” to the contrary. General observations, rather than tradable ideas.

Just like last week, I’m watching for for possible Sunday evening set up. Once again my focus is on CAD-JPY. This cross looks more promising othan other Yen pairs, having had very strong, directional move most of the day on Friday. Situation is not perfect. Ideally I’d like to see price more decisive during last few hours of trading. This time around we had a little bit of a slow down during that period, but not dramatic enough to prevent me from following this cross after the open.

Japanese Yen has been slowly showing signs of weakness. Since the end of August Japanese companies have been enjoying a tax break that encourages repatriation of overseas profits to Japan. By some accounts, initial rush to take advantage of the law is over and pendulum should swing the other way. I’m not sure if this is the case, but JPY crosses have indeed been under pressure over last few days. Friday was a very good example.

Swissy-Yen is in a process of building possible intermediate term bottom and could be a good buy on a move out the base. Interestingly enough. CHF is somewhat late here, other currencies are already past this stage, like CAD-JPY and EUR-JPY. If the move is for real, which is never a sure thing, CHF-JPY should also appreciate. If this happens, I want to be in at 87.40, with an objective of as much as 150 pips. Given the time frame used, 4H chart, this trade could take some time, few day to a week or so.

The other high fliers of resent weeks are also taking a break now. Australian Dollar and New Zealand Dollar have paused in their advances. Some crosses have shown small corrections already, but most are developing congestion zones, as if deciding which way to go next . One of these pairs is GBP-NZD. Hourly chart is building potential short term bottom. It is “short term” at the moment because of the time frame in use. I have a tentative buy order at 2.1810. Actual entry could very, depending of the spread at the time. It swings between 20-40 pips. If price approaches buy level while I’m watching markets, entry will probably be adjusted to some degree. This trade is seeking a move of 250 pips magnitude. Let’s hope it happens.

Mike K.