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EUR: Possibly attempt tiny longs at 1.3950; stop below 1.3840

Thu, Oct 2 2008, 06:45 GMT
by Nicole Elliott

Mizuho Corporate Bank


EUR

Comment: Collapsing all the way back down towards September’s low at 1.3882. Expect the Euro to try and form an interim base today so that we have a potential ‘double bottom’ on the chart.

Strategy: Possibly attempt tiny longs at 1.3950; stop below 1.3840. Short term target 1.4100, then 1.4400.


EUR/JPY

Comment: Back down to test September’s low at 147.00 but we doubt we will manage a sustained break lower today. Act cautiously but be ready to re-sell on a weekly close below 148.00. This might precipitate even higher one-month implied volatility so that it rallies to the 1999 high at 23.00%.

Strategy: Sell at 147.50 but only if prepared to add to 149.00; stop above 151.65. Short term target 147.00, 145.00 further out.


GBP

Comment: Dropping by more than we had thought and trying to cling above September’s low at 1.7445. Expect Cable to try and stabilise above here again today and tomorrow.

Strategy: Possibly attempt small longs at 1.7685; stop below 1.7600. Short term target 1.7900, maybe 1.8125.


JPY

Comment: Little to add as we consolidate below 107.00. If we can hold below the 26-day moving average at 106.60 bearish pressure should increase for a drop to 105.25 and maybe a collapse to 103.50 as early as Friday afternoon.

Strategy: Sell at 105.80/106.20; stop well above 106.60. Short term target 105.35, then 103.50.

Published on  Thu, Oct 2 2008, 06:50 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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