Daily Technical Analysis

EUR: Possibly attempt tiny shorts at 1.5765

Fri, Jul 4 2008, 08:45 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.

Published on  Fri, Jul 4 2008, 08:59 GMT

Archive

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

Legal disclaimer and risk disclosure

The information contained in this page is based on or derived from information generally available to the public from sources believed to be reliable. No representation or warranty is made or implied that it is accurate or complete. Any opinions expressed in this paper are subject to change without notice. This page has been prepared solely for information purposes and if so decided, for private circulation and does not constitute any solicitation to buy or sell any instrument, or to engage in any trading strategy.

Interested in forex trading? forex brokerage firms!


MF Global UK Limited
Contact the broker/FDM
Open a demo account		ACM Advanced Currency Markets SA
Contact the broker/FDM
Open a demo account
Ikon GM - Royal Division
Contact the broker/FDM
Open a demo account		Deutsche Bank
Contact the broker/FDM
Open a demo account		FXDD
Contact the broker/FDM
Open a demo account

FXstreet.com will give you a 3 months membership as soon as minimum rebates have been generated (€150 for private trader/ €300 for corporate trader)

[Read Premium full description]


Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer.

Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management.

Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

©2008 "FXstreet.com. The Forex Market" All Rights Reserved.