EUR
Comment: Dipping below 1.3450, giving up just over 50% of the March to April rally. Expect more attempts at forming an interim base today, noting that only a daily close above 1.3638 suggests this is in place. For today we favour more small random moves roughly between 1.3450 and 1.3550.
Strategy: Attempt small longs 1.3465; stop well below 1.3430. Short term target 1.3600, eventually 1.3670.
EUR/JPY
Comment: Precariously poised just below very important resistance at 164.00. We continue with a very cautious stance and weekly closes clearly above 164.00 are the minimum signal we need to alter our view. For today expect more small moves between 164.00 and 163.00.
Strategy: Do as little as possible. For those who have to: attempt tiny shorts at 163.60; stop above 164.15. Short term target 163.00 then 162.65.
GBP
Comment: Still probing the downside while holding in a ‘flag’ formation, and possibly the Ichimoku ‘cloud’ will provide support this week. Expect more work under 1.9800 this morning. Note that from very overbought Cable is now almost oversold and momentum is nil and implied volatility at 5.50% is closer to the lower end of the long term range.
Strategy: Attempt small longs at 1.9722; stop below 1.9675. Short term target 1.9800, then 2.0000.
JPY
Comment: The strongest daily close since late February and the US dollar is very overbought. Futures positions are being re-built and implied volatility is close to its record low of 5.92%. While above 120.50 upside probing will predominate. Expect yet more of the same today.
Strategy: Possibly attempt tiny shorts at 121.50; stop above 121.70. Target 120.70 short term then 119.55.
