EUR
Comment: Little to add as we continue to cling to the top of a very thin Ichimoku ‘cloud’ and below September’s high at 1.2830. Nevertheless support from the 9-day average and ‘cloud’ suggests we are building upside pressure for a move towards the top of the very broad band of the last six months. The Euro is no longer overbought and momentum is still bullish. For this morning allow for more work above the 1.2740 area, then up again very late today/tomorrow.
Strategy: Attempt longs at 1.2760/1.2740; stop below 1.2650. Short term target 1.2800/1.2830, then 1.2880.
EUR/JPY
Comment: Holding just under the all-time high at 150.80 in a right-angled ‘triangle’. Obviously we cannot stay in here forever, but there seems little point in anticipating the next move. Expect more consolidation below here again today, and the longer we hold above 150.00 the sooner a serious upside test.
Strategy: Trade the range between 150.20 and 150.50 with stop/reverse orders 30 pips either side of here
GBP
Comment: testing important long term resistance at 1.9100/1.9145. The 9-day average limited the downside yesterday and if it does so again today bullish momentum should increase. Note that Cable is not overbought and a weekly close above 1.9150 sets up for a sharp squeeze to very long term resistance around 1.9500.
Strategy: Attempt small longs at 1.9050/1.9000; stop below 1.8949. Short term target 1.9100/1.9145.
JPY
Comment: Holding in a narrow range above the top of the Ichimoku ‘cloud’. Momentum is zero and the US dollar is not oversold. Open interest is declining again and implied volatility is exceptionally low. For today allow for more consolidation above 117.00 and probably no higher than 118.00. We remind that later this month we still favour a fairly sharp drop to the 114.00 area.
Strategy: Attempt small shorts at 117.85/118.00; stop above 118.55. Short term target 117.20.
