Based on a weekly scan, I have a particular focus on the USD Index and the GBP Index.

The GBP Index is trading within a strong up-trend that suggests further strength in the next few months.

Further, the USD Index is trading at a critical juncture with a failure below its major support exposing major downside.

With the ATR trading at daily lows, I conclude that the GBP/USD will retrace in the shorter term and provide a good entry for a longer-term buy position. The downside is inversely related to the duration to which daily ATR stays below 80pips. At initial support and resistance levels, I would suspect 1.6670 to be a major pivot.

Aside from the GBP, I am encouraged by the USD/CHF trading pattern. I believe we will see a lower position over the next few months. It has been trading in a massive downward trend and with the weakening USD Index (as mentioned earlier), I would imagine this to be the case going forward.

At a fundamental level, the QE program is supposed to provide a catalyst for a recovery of the USD. I, however, do not believe this will be sustainable unless we notice a big increase in trade flows to the US reflected in the S&P500 rallying above 1900.
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