EUR
Comment: Still in consolidation mode with the Euro very much on the weak side of things. For this morning expect prices to hold between 1.2500 and 1.2700, with another squeeze to 1.2900 late today or later in the week.
Strategy: Possibly attempt small longs at 1.2590; stop below 1.2495. First target 1.2700, then 1.2900.
EUR/JPY
Comment: Yen crosses, and the ‘carry trade’ generally, should continue in corrective mode this week. This Yen cross should hold above 122.00 this morning and possibly squeeze back up to 127.00. A sustained break below 122.00 targets a re-test of October’s low at 113.62.
Strategy: Possibly attempt tiny longs at 124.55; stop/reverse below 122.00 for 118.00, maybe 114.00. First target 127.00.
GBP
Comment: Dropping below 1.6000 to a low at 1.5602 so far today. Trading far heavier than we had expected this week hinting that last week’s bounce will not be sustained through November. This hints that stock markets will also drop to new recent lows within the month and not in December as we had pencilled in.
Strategy: Possibly attempt small longs at 1.5675; stop below 1.5400. First target 1.6000 and maybe 1.6400.
JPY
Comment: Strange price action yesterday in a tiny range. We continue to favour another upside probe this week, to 102.00 and probably no higher than 103.00. This might also see implied volatility edge back up towards October’s record high of 43.50%.
Strategy: Possibly attempt small shorts at 98.85, adding to 99.50; stop/reverse above 99.85 for 101.60/102.00. First target 98.35, then 97.00.
