EUR
Comment: At last, signs of life in this moribund market! We have broken above the top of the Ichimoku ‘cloud’ and upside pressure should increase if we now hold above 1.3100. Next target: 1.3300. Note that the Euro is not overbought and that open interest is well below the record highs of late last year so a lot of position rebuilding still needs to be done.
Strategy: Buy on a dip to 1.3100; stop well below 1.3050. Short term target 1.3200, then 1.3300.
EUR/JPY
Comment: Consolidating below the all-time high at 159.00 and likely to do so again today. Dips are seen as buying opportunities for a move to new highs next month.
Strategy: Attempt longs at 157.50; stop below 156.00. Cover ahead of 159.00 but be ready to re-buy on a sustained break above 159.00 for 160.00 and then 164.00.
GBP
Comment: Rallying to the middle of the broad band in which we have been trading since November. Over the coming week/fortnight we favour yet another upside test of 1.9700/1.9750.
Strategy: Buy on a dip to 1.9600 but be prepared to add to 1.9500; stop below 1.9400. Short term target 1.9700/1.9750, then 1.9800.
JPY
Comment: Price action this year can probably best be seen as a slightly irregular ‘broadening top’. Daily and weekly closes below 120.00 complete the formation. Momentum is now bearish and the US dollar is not oversold. Watch for similar price action in other currencies as generalised US dollar selling takes off. Note that open interest in the futures contracts is at a record high, roughly double what it was three years ago. For this morning expect prices to try and hold above 119.75 but a break below here suggests another sharp slide to 119.00 short term.
Strategy: Sell on a bounce to 120.50; stop well above 121.50. Short term target 119.88 then 119.00.
