EUR
Comment: Consolidating neatly under the record high at 1.4508. The Euro is no longer overbought and it might struggle with the 1.4500/1.4550 area for another week or two. Dips towards the 1.4200 area are seen as medium term buying opportunities for new highs late this year.
Strategy: Possibly attempt tiny longs at 1.4440 but be prepared to add to 1.4380; stop below 1.4300. Target 1.4500/1.4550.
EUR/JPY
Comment: A small ‘bearish engulfing’ candle yesterday against trendline resistance close to all-time highs. We continue to warn that the ‘carry trade’ may not be around for much longer. A weekly close below 162.50, if not today then next week, should increase bearish momentum significantly.
Strategy: Attempt shorts at 165.65, adding to 166.00; stop above 166.85. Cover ahead of 165.00 but re-sell on a sustained break below 164.85 for 164.00 then 163.00.
GBP
Comment: Stalling at a multi-year high at 2.0875 and likely to consolidate below here today. Later this month/year-end we continue to allow for a squeeze up to 2.1100. Remember Thanksgiving this month marks the beginning of the holiday season so thin markets might mean overreaction and big price moves.
Strategy: Possibly attempt longs on a dip to 2.0785, adding to 2.0700; stop below 2.0525. Short term target 2.0875 and 2.1000/2.1100 medium term.
JPY
Comment: A small ‘bearish engulfing’ candle yesterday with a ‘spike high’ suggests we have established an interim high. The US dollar is not oversold and momentum is steadily bearish. We favour another drop today, down to 114.00/113.80.
Strategy: Sell on a bounce to 114.90/115.15; stop above 115.75. Short term target 114.00/113.80 maybe 113.25.
