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EUR: Possibly attempt tiny longs at 1.3670; stop below 1.3400
Thu, Oct 9 2008, 08:12 GMT
by Nicole Elliott
EUR
Comment: Mercifully calm amid mayhem in every financial sector. Still hovering nervously above a new recent low at 1.3444 in what is a potential C leg of an A, B, C-type correction where C is 0.6% of A. The Euro is oversold and bearish momentum its strongest ever, while the Brazilian real has lost 13.4% and South Korean won 12.1% versus the USD over the last 5 days! Central bankers making the smallest possible interest rate cuts, co-ordinated or coerced, underline the fact they have little grasp of the subject and even fewer tools.
Strategy: Possibly attempt tiny longs at 1.3670; stop below 1.3400. First target 1.3700, then 1.3900.
GBP
Comment: The Bank of England’s 50 basis point cut under whelmed. Cable dipped to a new recent low at 1.7173 today and one-month at-the-money implied volatility at 19.09% is at its highest in at least 15 years. Cable is oversold and bearish momentum is picking up again. This is a total mess.
Strategy: For those with lead-lined stomachs: possibly attempt tiny longs at 1.7250; stop below 1.7100. Short term target 1.7600, maybe 1.7800.
JPY
Comment: Dropping below the psychological 100.00 as the ‘carry trade’, in the guise of Yen crosses, are unwound at an alarming rate. One-month at-the-money implied volatility at 23.40% is closest to the 1998 high of 34.75% than it has ever been. The USD is very oversold and momentum is clearly bearish. The move lower that we expect looks to have started a little sooner than we had thought. Chaos reigns so only do what you have to do and remember, Japan plc is the nearest thing to a ‘safe haven’ that we have right now.
Strategy: Attempt small shorts at 100.45, but only if prepared to add to 103.00; stop above 104.50. Short term target 99.60, then 98.60 and possibly March’s low at 95.77.
Download Full EUR Technical Analysis
Published on Thu, Oct 9 2008, 08:16 GMT
Archive
- EUR: Possibly attempt small longs at 1.2675; stop below 1.2500
Published On Mon, Dec 1 2008, 07:35 GMT - EUR: Strategy remains unchanged: attempt longs at 1.2925, adding to 1.2800; stop below 1.2650
Published On Fri, Nov 28 2008, 07:18 GMT - EUR: Attempt longs at 1.2925, adding to 1.2800; stop below 1.2650
Published On Thu, Nov 27 2008, 07:28 GMT - EUR: Attempt longs at 1.2975, adding to 1.2800; stop below 1.2650
Published On Wed, Nov 26 2008, 07:40 GMT - EUR: Attempt longs on a drop to 1.2700, adding to 1.2600; stop below 1.2400
Published On Tue, Nov 25 2008, 07:50 GMT
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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