Forex

You may be interested to know that in 1997 Ben Bernanke wrote a paper that correlated rising oil prices (price shocks) with higher interest rates as major contributors to every US recession since 1971. As a savvy forex investor you may be asking "isn't that what happened in 2006-07?" You may also be asking "wasn't Bernanke chairman of the Fed in 2006-07?" Finally, you may ask "if he knew that why didn't he do anything until late 2007?" The answers to all those questions is: who knows?

At this point we have to think about how we are going to use this information in the forex. This week, this means that the risk crisis type movement of a strong USD against the commodity currencies and a weak USD against the JPY and CHF is in play. I think this is a good opportunity for short term plays in favor of that kind of movement and profit targets on the USD/CHF and USD/JPY are both set at the 261.8% retracement target level based on the most recent rallies.