EUR

Comment: Consolidating at these lofty levels allowing traders and investors a little time to get used to these historically high prices. The Euro is overbought but less so than it has been over the last week. Our first upside target at 1.3200 has been met and there is a chance of touching 1.3400 this month if we hold above 1.3000.

Strategy: Attempt small longs at 1.3150, adding to 1.3100; stop below 1.3000. Short term target 1.3200, above 1.3220 should set off another flurry of buy stops are likely to be triggered taking the Euro to 1.3400.

EUR/JPY

Comment: Consolidating surprisingly neatly just below the new all-time high at 153.43. At-the-money implied volatility has exploded higher from record lows so traders are pricing in the risk of more big sharp moves. The Euro is still overbought against the Yen and bullish momentum has eased. Prices are likely to hold below 153.50 this morning and maybe all day, but while above 151.80 the next step is likely to be a squeeze to 155.00.

Strategy: Attempt small longs at 152.80, adding to 152.30; tight stop below 151.70. Short term target 153.25, then 154.00 and eventually 155.00.

GBP

Comment: Trading just below the December 2004 high of 1.9552, which itself is multi-year pivotal resistance, and giving up almost nothing on the downside. Allow for more work below here today, noting that we shall be watching closely to see where the monthly closes lie today in order to determine the direction and extent of possible moves over the next two months.

Strategy: Possibly attempt tiny longs at 1.9450/1.9400; stop below 1.9200. Short term target 1.9550, then 1.9590.

JPY

Comment: Struggling below the 116.50 area again in what looks like an inverted ‘pennant’. Note that the lagging span is currently lying at the bottom of the Ichimoku ‘cloud’ so a sustained break below 116.00 today should add considerable downside pressure. We continue to favour a move lower to 114.00 but probably not today and not until next week.

Strategy: Sell at 116.15/116.25; stop well above 116.50. Short term target 115.50, eventually 114.00.