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EUR: Buy at 1.4635; stop below 1.4500

Fri, Sep 26 2008, 06:35 GMT
by Nicole Elliott

Mizuho Corporate Bank


EUR

Comment: Looking for direction with a tiny little ‘doji’ candle yesterday within a potential ‘flag’ formation. Expect more consolidation today around the 38% Fibonacci retracement area. If not today, then maybe next week, a weekly close above 1.5000 would be very bullish indeed forcing many into slashing newly placed dollar longs.

Strategy: Buy at 1.4635; stop below 1.4500. Short term target 1.4800, then 1.4900.


EUR/JPY

Comment: Tricky as we work in a potential ‘pennant’ formation and consolidating at the 38% retracement level. While we still favour cautious topping activity this week and next prior to another downside test next month, there is a chance of another short squeeze to the 158.00 area before topping.

Strategy: Possibly attempt very small shorts on a bounce to 155.00; stop well above 157.05. Short term target 154.00, maybe 153.00.


GBP

Comment: Tried to break above a potential small ‘flag’ formation yesterday but no luck. Expect a little more work within this today prior to another move higher late today or next week (possibly a gap over the weekend). Cable will probably lead other currencies.

Strategy: Buy at 1.8400; stop below 1.8200. Short term target 1.8600/1.8670, then 1.8800.


JPY

Comment: Retreating quickly from yesterday’s high at 107.03 and set to test the downside later today. Over the next week or two we favour another concerted test of the increasingly pivotal 104.00 area. Note that the US dollar is not oversold and there is scope for much stronger bearish momentum.

Strategy: Sell at 105.70 adding to 106.35; stop above 107.10. Short term target 105.50/105.15, then 104.00.

Published on  Fri, Sep 26 2008, 06:40 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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