Price is very important in foreign exchange. If you get bearish or bullish at the wrong level, it can be very costly. EUR/USD was a stand-out buy for me at 1.31 a few short weeks ago but in reality not all that much has changed since. The market has gone from short to slightly long and sentiment has turned from bearish to slightly bullish. Now is the time to start putting offers in the market and booking some profits. I still expect EUR/USD to test 1.50 in the coming weeks but I’m not sure if we are going to go in a straight line or if we now consolidate for a period before the next push. USD/JPY is in a 92/102 range as I’ve maintained for months and is again nearing the bottom of this range. I expect the AUD/USD to struggle to hold above .80 for an extended period. There is excellent technical resistance at .8370, the big golden Fibo, and I will be selling rallies towards there.
The danger with being long EUR or AUD at current levels is the return of risk-aversion. If it comes back, some of these pairs will have a long way to fall before reaching stable levels. Buying dips is certainly still the strategy but don’t forget to include price in your calculations and to sell rallies as well.
