EUR
Comment: Consolidating very neatly in a tiny range at the top of 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: Strategy remains unchanged: 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 before re-buying.
EUR/JPY
Comment: Nothing to add as we remain within a ‘triangle’ but note the very large Ichimoku ‘cloud’ which is bearing down steadily over the coming month.
Strategy: Attempt shorts at 123.15, adding to 124.60; 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: Re-drawing trendlines and things look a lot more boring. 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 1.5200; stop well below 1.5000. First target 1.5500, adding to longs on a break above 1.5650 for 1.6000.
JPY
Comment: The market has come to a complete halt in the middle of the large ‘triangle’ pattern. As and when we break below the bottom of the formation 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 95.35, adding to 96.00; stop well above 98.30. First target 94.00, then 93.00.
