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Daily Technical Analysis

EUR: Possibly attempt tiny shorts at 1.5765

Tue, Jul 1 2008, 07:07 GMT
by Nicole Elliott

Mizuho Corporate Bank

EUR

Comment: Up at some of the highest ever levels but a small ‘spike high’ Friday hints that we shall consolidate below 1.5800 today. One-month at-the-money implied volatility is expected to hold above 9.00% and could move back up to March’s 12.50% if we start holding above 1.5850.

Strategy: Possibly attempt tiny shorts at 1.5765; stop/reverse above 1.5850 for 1.6000. Short term target 1.5725, then 1.5650 if we can manage a break below 1.5700.

EUR/JPY

Comment: A ‘shooting star’ candle on the weekly chart here and in a number of other Yen crosses suggests we have found an interim high. Because we managed a new record high against the Euro at 169.45 the drop could be sharper than many might imagine. Downside pressure should increase significantly on a sustained break below 165.00, as it does if we hold below first resistance at 167.37.

Strategy: Sell at 16.65, adding to 167.35; stop above 168.25. Add to shorts on a sustained break below 166.00 and again below 165.50 and 165.00 for 158.65.

GBP

Comment: Consolidating happily under the psychological level of 2.0000, above which buy stops probably lurk. Bullish pressure increases if we hold above 1.9800 today.

Strategy: Attempt longs on a dip to 1.9900, adding to 1.9800; stop below 1.9750. Short term target 2.0000/2.0050, then 2.0500.

JPY

Comment: A ‘doji’ monthly candle under the 50% retracement resistance and around 1 standard deviation of the last decade at 107.00. This suggests instability at current levels and over the next few months we expect the Yen to strengthen. One-month at-the-money implied volatility is likely to hold above the mean at 10.50% and should push up towards 13.50% as and when we break below 105.00. For this morning expect prices to try and consolidate between 105.50 and 106.50. The longer we hold below here the sooner the break below 105.00 which should set off some stops taking prices down to 103.00.

Strategy: Attempt small shorts at 105.75 but be prepared to add to 106.45; stop above 107.25. Short term target 105.00, eventually 103.00.

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• Download Full JPY Technical Analysis

Published on  Tue, Jul 1 2008, 07:20 GMT

Archive

• EUR: Attempt small longs at 1.4780, adding to 1.4685
  Published On Thu, Aug 21 2008, 06:21 GMT
• EUR: Attempt longs at 1.4765, adding to 1.4665; stop below 1.4600
  Published On Wed, Aug 20 2008, 06:35 GMT
• EUR: Attempt small longs at 1.4660; stop below 1.4600
  Published On Tue, Aug 19 2008, 06:52 GMT
• EUR: Attempt small longs at 1.4740/1.4700
  Published On Mon, Aug 18 2008, 07:02 GMT
• EUR: Possibly attempt tiny longs at 1.4770; stop below 1.4700
  Published On Fri, Aug 15 2008, 06:59 GMT

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Mizuho Corporate Bank  | 1-3-3, Marunouchi, Chiyoda-ku, Tokyo 100-8210
http://www.mizuho-cb.co.uk | Nicole.Elliot@mhcb.co.uk