EUR
Comment: Too boring for words as it remains trapped in a narrow range between the mid-point and the upper edge of the trading band of the last six months. A sustained break above 1.2850 hopefully later today should set off a squeeze to increasingly important resistance at 1.2900.
Strategy: Buy at 1.2815/1.2790; stop below 1.2745. Short term target 1.2880/1.2900.
EUR/JPY
Comment: Nudging to a new record high at 151.68 yesterday and if we can hold above the 9-day moving average at 150.93 this morning expect a re-test of this level later today. The cross is no longer overbought and momentum remains bullish. Implied volatility dropped again to new record lows. Sooner rather than later this pair should break higher.
Strategy: Attempt small longs at 151.40, adding to 150.90; stop below 150.50. Short term target 151.65 and 155.00 medium term.
GBP
Comment: With a little luck prices will hold above 1.8900 again this morning, setting up for a short squeeze above 1.9000. Note that Cable is not overbought and that momentum is just bullish.
Strategy: Buy on a dip to 1.8950/1.8930; stop below 1.8830. Short term target 1.9050 then 1.9150.
JPY
Comment: Still stuck in a very narrow range, inside a fat Ichimoku ‘cloud’, so no wonder at-the-money implied volatility has dropped again and very close to the record low of 1996. For today expect more of the same, roughly between 117.50 and 118.20, noting that weekly trendline support lies at 116.75.
Strategy: Sell at 118.10/118.20; stop above 118.60. Short term target 117.50 then 117.00.
