EUR
Comment: Little to add as we consolidate in a small ‘triangle’ and at-the-money implied volatility holds at a relatively expensive 23.00%.
Strategy: Attempt longs at 1.2840/1.2800; stop below 1.2495. First target 1.3000, then 1.3300.
EUR/JPY
Comment: Consolidating in a ‘triangle’ and a potential ‘pennant’ under the 38% retracement resistance level of the final leg lower. Therefore we feel there is still a small chance of a squeeze above the recent high at 131.00.
Strategy: Possibly attempt small shorts at 127.25 but be prepared to add to 130.00; stop above 131.25. Cover shorts ahead of 122.50.
GBP
Comment: Dull and disappointing and we shall probably have to put with more of the same this week. Beware drawing trendlines too tightly and note that at-the-money one-month implied volatility remains very high at 23.00%.
Strategy: Attempt longs at 1.5700, adding to 1.5600; stop below 1.5400. First target 1.6000 then 1.6400.
JPY
Comment: Little to add as we continue to consolidate around 99.00. Expect more of the same today and maybe for most of this week. Note that the ‘Lagging’ line at 99.00 is approaching candle resistance for the next fortnight between 99.00 and 102.00. Note that despite decent volume open interest in the futures contract is less than half last year’s peak.
Strategy: Attempt small shorts at 99.00, adding to 100.00; stop above 100.65. First target 98.35, then 97.00.
