EUR
Comment: Inching to another new record high at 1.4753 yet the Euro is looking a little ‘tired’ after Friday’s ‘doji’. This hints at a bout of consolidation this week. Note that one-month at-the-money implied volatility has exploded and is likely to remain high this month.
Strategy: Possibly attempt tiny shorts at 1.4700; stop/reverse above 1.4765 for 1.4850. Short term target 1.4615, maybe 1.4475.
EUR/JPY
Comment: More signs of topping with a sustained break below October’s low at 160.47 and retracement support adding considerable downside pressure. Yen crosses are expected to be the biggest movers this week so it is understandable that at-the-money implied volatility has exploded.
Strategy: Sell at 161.2, adding to 162.405; stop above 164.00. Add to shorts on a sustained break below 160.35 for 158.50 short term and an awful lot lower further out.
GBP
Comment: Balking at multi-year high at 2.1162, our long-held long term target. For this week expect consolidation with very sharp intra-day price swings. At-the-money implied volatility should increase yet further.
Strategy: Possibly attempt tiny shorts at 2.0800, adding to 2.0925; stop above 2.1100. Short term target 2.0750, maybe 2.0600.
JPY
Comment: Collapsing last week to the lowest so far this year and close to last year’s low at 108.97. Gapping lower this morning, here and in several other Yen crosses, and many ‘bearish engulfing’ candles on the weekly charts. This suggests that despite being oversold downside momentum will drag these lower again this week. Target 109.00 short term and 105.50 longer term.
Strategy: Sell on a bounce to 110.50, adding to 111.15; stop well above 112.00. Short term target 109.00.
