An interesting week ahead for fixed odds trading, as the Federal Reserve finally begin to implement the long awaited second phase of quantitative easing, christened QE2 by the markets, which has been the dominant fundamental news driving markets for the past few weeks. In particular we have seen continued US dollar weakness on the dollar index chart, as the FED’s policy helps to weaken the dollar, something which many of the world’s central banks are now desperate to achieve in order to support their export driven economies and prevent a further falls in economic output. As a result the currency wars have now erupted around the world as self interest becomes the norm and intervention or quantitative easing the weapon of choice. For forex traders this week, we should look for continued weakness in the US dollar which will drive the AUD/USD higher and through parity, whilst at the other end of the parity scale we are likely to see the USD/CAD moving in the opposite direction. The EUR/USD continues to climb higher, although we may see a short term pullback early in the week following the two consecutive doji candles on Thursday and Friday, so expect to see a move lower in the short term, but the longer term bullish trend remains firmly in place, and 1.45 is my short term target. The same is true of the GBP/USD, where short term weakness may appear early in the week, but expect to see a return to bullish momentum as we move into the heavy congestion between the 1.6000 and 1.6700 region. The EUR/GBP should continue its recent bullish move higher, and 0.9000 and beyond now looks achievable, whilst the USD/CHF remains feeble and set to fall further in the near term as the CHF remains a safe haven status.

In the commodity markets, gold, and silver have grabbed the headlines, and continue to look extremely bullish in the short term, as we head towards $1450 per ounce for gold and $26.50 per ounce for silver. Both are benefiting from investors looking for safe haven status and a hedge, and something that is likely to hold its value in either a deflationary or inflationary environment. Palladium has also been part of the bullish trend, along with copper, which has continued to climb steadily higher, and these also look good bullish best for longer term fixed odds traders. Staying with commodities, the grains complex has seen some bullish gains in the last few weeks, fuelled by the recent USDA report which forecast corn yields at 4% lower than expected which cause a surge in corn future, which spilled over into soybean and wheat. The bullish trend for both corn and soybean look strong with corn going to 600 cents per bushel and soybean to 1200 cents. Wheat on the other hand looks rather weaker and may be worth watching before placing a no touch trade to the upside in due course as a break and hold below recent price congestion will lead to a further decline in due course.

In equities, the bullish risk on appetite continued last week once again, but at a slower pace as the markets move cautiously higher. The end of last week was marked with sideways price action in a relatively narrow range, but the longer term trend remains firmly bullish with both the FTSE 100 and the Dow Jones 30 remaining firmly above their short term moving averages on the daily charts. You can read more of my forecasts and analysis by simply clicking on the relevant market in the left hand sidebar of the site, or by following me on Facebook which you can find in the right hand sidebar.

Good luck and good trading this week