EUR

Comment: Relatively calm as crosses get hammered. It still needs a sustained break above 1.3065 to set off buy stops and turn momentum bullish; it would also hint that an interim low is in place. The Euro is not overbought and should be helped along by other currencies doing something similar. For this morning expect basing activity around 1.2950 and a squeeze back up to 1.3050 by the end of this week.

Strategy: Attempt longs at 1.2965; stop below 1.2900. Short term target 1.3050, then 1.3120/1.3135.

EUR/JPY

Comment: Slapped down from a record high at 158.62 with massive intra-day gyrations. We remain within normal retracement parameters. Do not jump the gun and assume candles will be bearish at the end of the day or the end of the week/month. For this morning allow for consolidation between 156.00 and 157.00 and be aware that this pair is likely to be a lot more difficult to trade over the next two weeks. We still feel that dips are probably buying opportunities for another probe higher.

Strategy: Possibly attempt small longs at 156.25 but be prepared to add to 155.50; stop well below 155.00. Short term target 157.00/157.50.

GBP

Comment: Giving up 38% of the latest leg higher and behaving marginally better than some other currencies. We continue to favour another bout of consolidation under 1.9900 with dips hopefully holding above the 1.9600 area and a very thick Ichimoku ‘cloud’.

Strategy: Attempt tiny longs at 1.9650, adding to 1.9600; stop below 1.9500. Short term target 1.9750 then 1.9830.

JPY

Comment: Our caution this month has been vindicated with massive intra-day price swings and a sharp sell-off over the last two days. Trendline support is holding at the moment but probably not for much longer, with more sell-stops likely below 120.00. The US dollar is not oversold but open interest has set a new record high. For this morning allow for more work between 120.00 and 121.00, with downside pressure increasing the longer we hold below 121.25. Then down again late this week/next week to 119.80/119.50.

Strategy: Attempt shorts on a bounce to 120.70/121.00; stop above 121.90. Short term target 120.20, then 119.80/119.50.