Dave Floyd is a professional FX and stock trader based in Bend, OR and the President of Aspen Trading Group. Dave's approach to FX combines technical and fundamental analysis that results in trades that fall into the swing trading time frame of several hours to several days. For a free trial to Dave Floyd's Daily Forex Alerts click here.

Monday’s Observations & Trade Ideas

USD/JPY - like all pairs overnight, USD/JPY put in a powerful move higher overnight as Mid-East tensions send traders scrambling for the dollar.  Nonetheless, the 116.96 level represents a possible resistance area for this pair as it is a bull trend-line on the daily chart.

Naturally, for now, this is a level worth watching, not an area to look for short entries.  Currently the market is too dollar bullish to be looking for 'reversal' trades.

We will note in some forthcoming postings that many pairs are very extended on the heels of the overnight action, but given the current climate, these pairs could simply become 'more extended' - this is not a market for picking tops and bottoms.

EUR/JPY – modest upside seen despite bearish RSI divergence

NZD/USD - As noted earlier, NZD/USD (and the NZD crosses) are quite firm.  The last 30-minutes has seen a nice rebound in NZD/USD and prices are poised to trade through the overnight highs at .6227 - this level is actually a bear trend-line drawn in from the Dec 5, 2005 high

EUR/NOK - in response to higher oil prices, has begun to move lower with solid conviction.  The current inverse correlation between this cross and the price of oil is at 70% - assuming this remains somewhat constant, higher oil will push this cross lower in the days ahead.  Look for 7.9135-75 to cap any rallies

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As always, feel free to send me your comments and questions.

Dave

aspendave1@gmail.com

Aspen Trading Group

http://www.aspentrading.com/