EUR
Comment: Dropping below the small ‘triangle’ and at-the-money implied volatility rallies from a still relatively expensive 21.00% to 23.50%. Let’s see if we can hold above this year’s low at 1.2329 for the rest of this week.
Strategy: Attempt longs at 1.2600; stop below 1.2475. First target 1.2700, then 1.3000.
EUR/JPY
Comment: Testing the lower edge of the recent consolidation band as pressure on unwinding of the ‘carry trade’ and emerging markets escalates a little further.
Strategy: Possibly attempt tiny longs at 123.50; stop/reverse below 121.00 for 118.00, maybe 116.00. Cover longs between 128.00 and 130.00.
GBP
Comment: Re-testing the recent low at 1.5260 with a low at 1.5347 this morning as one-month at-the-money implied volatility rallies from 22.00% and should move back up to this year’s high at 29.45%.
Strategy: Possibly attempt tiny longs at 1.5465; stop below 1.5300. First target 1.5800 then 1.6000.
JPY
Comment: Subtly looking marginally more top-heavy as we test the lower edge of ‘triangle’ consolidation. One-month at-the-money implied volatility appears to have based at 20.00% and looks set to move back up towards 32.00%.
Strategy: Attempt shorts at 97.75 but only if prepared to add to 99.00; stop well above 100.00. First target 97.00, then 96.00 below which should probably trigger a sudden collapse to 92.00.
