EUR
Comment: Gapping higher in the Far East this morning and now consolidating below 1.3180. The Euro is overbought but this is unlikely to hold it back for too long because thin markets and it has to make up for time wasted earlier this year. Our upside targets are 1.3200 short term and 1.3400 further out.
Strategy: Buy at 1.3100, adding to 1.3000; stop below 1.2950. Short term target 1.3180/1.3200, above which another flurry of buy stops are likely to be triggered taking the Euro to 1.3400.
EUR/JPY
Comment: Gapping higher this morning after the strongest ever weekly close. This, coupled with Friday’s strong rally from a low at 150.37, suggests that a new interim low is in place and that the very long term trend higher remains intact. We continue to favour a rally to 155.00 where more consolidation is likely.
Strategy: Attempt small longs at 152.35/152.00; either use a tight stop below 151.50 or be prepared to add to 151.00; stop below 150.30. Short term target 152.50, then 154.00 and eventually 155.00.
GBP
Comment: The strongest weekly close in years and years and years is worth noting. Cable is overbought but pent up demand ought to set up fro a re-test of 1.9500/1.9550, the December 2004 high.
Strategy: Buy at 1.9370/1.9300; stop below 1.9200. Short term target 1.9450/1.9475, then 1.9500 and possibly the December 2004 high at 1.9550.
JPY
Comment: A clear downside break on the weekly chart but there are plenty of support levels on the way down. The dollar is only slightly oversold and momentum is bearish. Prices will probably try and consolidate this morning above 115.40, squeezing to 116.50 and probably no higher than 117.00. Below 115.40 targets 114.00, which we feel will be touched before the end of the month.
Strategy: Sell at 116.00, adding to 117.00; stop well above 117.20. Short term target 115.50, eventually 114.00.
