EUR

Comment: The strongest weekly close in a while but still within the very large ‘flag’ formation. There are plenty of chart levels on the way up, but hopefully generalised US dollar weakness will sent currencies one by one though these hurdles. Bullish momentum is at its strongest since early August (when the Euro touched 1.2913) and the Euro is overbought. Open interest is till well below record highs hinting that a lot of new longs will have to be established as and when we manage a serious break higher. For today if we can hold above 1.2820 upside pressure should increase. 

Strategy: Buy at 1.2865/1.2835; stop well below 1.2775. Short term target 1.2900, then 1.3000. 

EUR/JPY

Comment: The strongest weekly close ever, clearly above the top of a right-angled ‘triangle’. Some other Yen crosses look similar, so we feel this signals the start of another round of Yen weakness. For this morning and maybe all day allow for consolidation between 150.50 and 151.50; then up again next week where our medium term target lies at 155.00.

Strategy: Buy at 151.00, adding to 150.50; stop below 150.20. Targets as above.

GBP

Comment: The strongest weekly close this year but just below important long term resistance at 1.9100/1.9145. Note that Cable is not overbought and that momentum is only just bullish. If not this week then later this month we continue to expect a rally to very long term resistance around 1.9500.

Strategy: Buy at 1.9095, adding to 1.9045; stop below 1.8975. Short term target 1.9145/1.9180, then 1.9220 and 1.9325.

JPY

Comment: Drifting lower following Thursday’s ‘spike high/shooting star’ candle and consolidating inside the Ichimoku ‘cloud’. Momentum is just bearish and the US dollar is not oversold. For today allow for more consolidation between 117.00 and 118.00, noting that a close below 117.00 should increase downside momentum by enough to test weekly trendline support at 116.60 this week

Strategy: Sell at 117.30, adding to 118.00; stop above 118.60. Short term target 117.20, then the more important 116.55 area.