Daily Technical Analysis

EUR: Possibly attempt tiny shorts at 1.5805

Wed, Jul 2 2008, 06:53 GMT
by Nicole Elliott

Mizuho Corporate Bank


EUR

Comment: Consolidating neatly around 1.5800. 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. For this morning expect an upside test of the 1.5835/1.5850 area, possibly with a squeeze through here to 1.5905.

Strategy: Possibly attempt tiny shorts at 1.5805; stop/reverse above 1.5850 for 1.6000. Short term target 1.5725/1.5700.


EUR/JPY

Comment: Testing the downside but not ready to break lower just yet. Downside pressure should increase significantly on a sustained break below 165.00, as it does if we hold below 167.80.

Strategy: Sell at 167.45; 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: Briefly trading above the psychological level of 2.0000 and likely to see a series of probes above here to a band of resistance up to 2.0050. Bullish momentum should increase if we hold above 1.9800.

Strategy: Strategy remains unchanged: 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: Nervous intra-day moves but not really going too far in any direction. For this morning expect yet more work between 105.25 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 106.35; stop above 107.25. Short term target 105.00, eventually 103.00.

Published on  Wed, Jul 2 2008, 07:01 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

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