My focus this week is on the USD/index. It has some very defined trend lines that create the correct look of an ending diagonal. I would express that extreme caution and vigilance is required around the current trend-line as this pattern can also be viewed as a leading diagonal or in other terms; basing to go higher.

The key is to wait for good signals at the defined levels for break-throughs or break-downs. Considering all the attention being given the markets this weekend by the G20 summit we could/should be in for another volatile week.

The USD is still being favoured as the safe haven currency in this mess. The thing is though, just a few short weeks ago some annalists and news media where reading the USD its last rights. Expecting further demise.

Overall sentiment (Fear) is what moves the market and sooner or latter this fear based thinking will flip back against the Dollar. At least for a short time.

So keep an eye and ear to the Media. When they start saying the Euro and the GBP are doomed, then I would start expecting a reversal.

EUR/USD - Could go either way - I'm expecting a thrust downward and then a reversal. BUT - A break above the range would result in a strong climb.

GBP/USD - Same as for EUR/USD. Play the break of the range when it breaks out.

EUR/JPY - Again here's a pair that offers a nice range and should a thrust downward take place I expect it will be limited as a correction should go a little higher.

USD/CAD - Everything here points to a double top. However this pair has a mind of its own and is very volatile and needs to be traded with extreme caution.

Cheers and good trading

It's not hard to see by the patterns on all major pairs that the currency market is moving based on a value highly associated to the USD. Right now the market is moving as 'One market; All markets' and will likely continue to do so for some time to come. (Maybe even for months ahead yet)

You can see by the charts that most pattern as highly correlated and traders are very attached to what the USD is doing.

It's hard to be sure if we will see more correction to the big recent gains of the dollar but I would suggest we do need a little more balance in the market in the form of some USD weakness for may a week or so.

Having said that the levels to watch are quite well defined so trade accordingly.

Cheers