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Global markets are down ahead of the US session, a decline that should be part of some larger, deeper pull-back. We know that pull-backs are structured by at least three waves; even if it’s only corrective move, which means that we should see more weakness on stocks after small near-term rally, suggested by the S&P Futures chart below.

Guest post by Gregor Horvat.

If we are correct, then dollar should be supported which means that Eur/Usd, Aud/Usd and Gbp/Usd should trade below resistance, while Usd/Cad above the support.   Trader may look for Long USD moves in the near future with this outlook; of course if things will not change dramatically.

One of the weakest currency today is Pound, so selling Gbp/Usd makes sense, rather than Eur/usd per example.

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