The cable continues treading water between 1.95 and 1.98. Volatility has been on the increase recently and the market seems unable to decide on its overall direction. The long term trend remains up but the Pound is going to need some type of economic catalyst to push it to new highs.
A large head fake on Friday morning briefly pushed the euro up through 1.3050 only to reverse and end the day lower. Support at 1.2920 & 1.2875 and resistance near 1.3025 continue to hold this pair range bound, and until we get a fundamental shift expect that range to continue.
This pair has been unable to push through 122 resistance and the range continues to expand between 120.20 and 122.. The economic outlook for Japanese rates remains uncertain and until the market can gain a more accurate outlook this pair will continue to move sideways. Selling 122 calls could be an efficient way to generate returns from this market.
This pair has been trading very similar to the USD/JPY, as it has been trading between 1.24 support and 1.2550 resistance. Selling calls above that resistance level while buying further out of the money calls could bring in some good volatility premium.
The Aussie has been consolidating between .7700 and .7775 after breaking down two weeks ago from .7950. The outlook remains uncertain for this pair though fading this pair above .7775 is one way to capitalize on the markets lack of strength.
This pair finally looks like it might be able to sustain a push above 1.1850. The strength of this pair has been remarkable for the last few months. Until the dollar shows any visible signs of weakness the long side of this pair definitely presents the traders with the best long term trend.
Odom & Frey
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