EUR
Comment: Struggling with long term resistance at 1.2980, June 2006 high, and we remind that above here there are likely to be some serious stops. Allow for a little hesitation below here this morning and maybe all day. However, some time this month in holiday-thin markets, we expect another explosive move higher to the 1.3100 area. Good upside pressure remains while above 1.2850.
Strategy: Buy at 1.2965, adding to 1.900; stop below 1.2850. Short term target 1.3000, above which a flurry of buy stops are likely to be triggered.
EUR/JPY
Comment: Pulling back from the record high at 151.68, but fairly neat and no mad scramble. We shall continue taking one day at a time. For today expect more work below 150.50, probably with an attempt to form an interim base against 150.00. Note that the Euro is no longer overbought against the yen and that momentum is now neutral, not bearish.
Strategy: Possibly attempt tiny shorts at 150.75/151.00; stop above 151.20. Target 150.50/150.00.
GBP
Comment: Cable is unlikely to manage a sustained break above 1.9180 unless other currencies break key levels too. However, the fact that it managed to hold in such a tiny range yesterday at the very top of the consolidation pattern suggests that a break higher is imminent. If not today then next week we target a scramble 1.9220 short term and then 1.9300.
Strategy: Buy at 1.9135/1.9100; tight stop below 1.9050 to re-buy at 1.9000; stop below 1.8950. Short term target 1.9170, then 1.9300 and then the December 2004 high at 1.9550.
JPY
Comment: Dropping to 116.00, the 200-day moving average, as expected. After two sharp days down prices will probably try and hold above here today, but there is still a chance that we might continue on down to 115.75, the 38% Fibonacci retracement from May’s low at 109.00 to October’s high at 119.20. Below 115.45 targets 114.00, which we feel will be touched before the end of the month.
Strategy: Sell at 116.40, adding to 117.00; stop well above 117.20. Short term target 116.00 and maybe 115.50.
