EUR
Comment: Re-drawing the ‘triangle’ formation as we remain within the range established late October. A weekly close above 1.3200 should set off the first round of short-covering, which may gain massive momentum in thin December conditions.
Strategy: Attempt longs at 1.2925, adding to 1.2800; stop below 1.2650. Cover longs between 1.3050 and 1.3100 and stand aside watching for a strong weekly close.
EUR/JPY
Comment: Nothing to add as we remain within a ‘triangle’. The longer we hold below the 128.00 area the sooner will we test and break below the lower edge.
Strategy: Attempt shorts at 122.85, adding to 125.00; stop well above 127.30. First target 122.00 then 118.00. Re-sell in earnest on a break below 116.40 for 114.00.
GBP
Comment: Holding above the top of the downward-sloping ‘wedge’ formation, holding in a small neat range. We are well within normal retracement parameters but another round of short-covering is likely on a sustained break above 1.5650, targeting 1.6100.
Strategy: Attempt longs at 1.5425 but only if prepared to add to 1.5100; stop below 1.4700. First target 1.5500, then 1.6000.
JPY
Comment: Holding in the middle of the large ‘triangle’ pattern and should test the downside of the formation by the end of this week. As and when we break below here one-month at-the-money implied volatility should base at the 20.00% area and then edge up to 28.00%, maybe a lot more when we break below October’s low, probably some time in December.
Strategy: Sell at 95.00, adding to 96.00; stop well above 98.30. First target 94.00, then 93.00.
