According to Light, a clear theme developing in the last week is the divergence of European currencies against the commodity related currencies, which has left the US dollar pretty much side-lined.

Looking at the daily EURUSD chart, it is clear that the market remains in a powerful downtrend which looks set to continue, Light says.

But the daily chart of AUDUSD shows that the US dollar is no longer the dominant force across the majors. The Aussie is clearly stronger and this market has plenty more upside, Light says.

With currency trading all about pairing strength against weakness, Light believes that the best way to play this theme is to sidestep the US dollar and head straight to EURAUD

“We can see from EURAUD’s daily candle chart that this pair has plenty of bearish momentum. Prices have retraced against the trend overnight and we expect this trend to resume as European markets open up,” Light says.

He is looking to place a limit order to sell at 1.4860 with a stop above the trendline at 1.5032 and a limit order to take profits at 1.4333.