EUR
Comment: Hovering just above the Ichimoku ‘cloud’ as it tries to decide whether it is worth squeezing higher. For this morning we shall allow for yet more consolidation around 1.2750, and if prices hold above 1.2725 bullish momentum should increase despite the Euro being a slightly overbought.
Strategy: Attempt small longs at 1.2740/1.2725; stop below 1.2650. Target 1.2780, then 1.2825.
EUR/JPY
Comment: Same story: hovering above 149.00, trendline support and the top of the Ichimoku ‘cloud’. While below 150.00 downside pressure should increase for a drop to 148.20.
Strategy: Attempt small shorts at 149.50; stop above 150.00. Short term target 149.00, later 148.50/148.20.
GBP
Comment: Balking at August’s high at 1.9146 and needs help from other currencies to break above here and squeeze up to 1.9325 and then the December 2004 high at 1.9550 medium term. Increasing open interest and an overbought pound make for a tricky combination and hint at overconfidence.
Strategy: Buy at 1.9050, adding to 1.9000; stop well below 1.8950. Short term target 1.9100/1.9145, then 1.9325.
JPY
Comment: Hovering slightly unsteadily around the top of the Ichimoku ‘cloud’. Momentum is now clearly bearish and the US dollar is not exactly oversold, and futures positions have been slashed dramatically. For today allow for more consolidation above 116.50, and probably no higher than 117.50. Then down again with the next short term target at 116.10.
Strategy: Sell at 117.00, adding to 117.40; stop well above 118.05. Short term target 116.65, then 116.10.
