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EUR: Buy at 1.3540; stop well below 1.3500

Tue, Jan 6 2009, 07:43 GMT
by Nicole Elliott

Mizuho Corporate Bank


EUR

Comment: Retracing 50% of December’s rally holding on the top of a very large weekly Ichimoku ‘cloud’. The move is seen as an A, B, C-type correction where C=A, currently trading at the 26-day moving average and the lagging Span also has support from the ‘cloud’. Therefore we expect the Euro to base around current levels today and rally towards 1.4100 by the end of the week.

Strategy: Buy at 1.3540; stop well below 1.3500. First target 1.3800, then 1.4000.


EUR/JPY

Comment: Very boring and rather messy. This Yen cross is working in the middle of a very large Ichimoku ‘cloud’ and below first retracement resistance. This may cap again today suggesting a drift down to the 26-day average at 123.45.

Strategy: Attempt shorts at 125.80, adding to 128.50; stop above 129.75. First target 125.45, then 123.45.


GBP

Comment: Mercifully quiet as Sterling losses take a breather. Cable is still consolidating at current levels, trying to base in a downward-sloping ‘wedge’ formation. Expect more of the same this week.

Strategy: Attempt small longs at 1.4590; stop below 1.4300. First target 1.4800, then 1.5035.


JPY

Comment: Retracing almost 50% of the previous decline after breaking above immediate trendline resistance. The 9 and 26-day moving averages have turned positive suggesting that another cautious squeeze higher towards 95.00 which is possible. This is seen as a selling opportunity for declines later this quarter.

Strategy: Attempt small shorts at 93.00; stop well above 93.60. First target 92.00, then 91.00.

Published on  Tue, Jan 6 2009, 07:54 GMT


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Mizuho Corporate Bank  | 1-3-3, Marunouchi, Chiyoda-ku, Tokyo 100-8210
http://www.mizuho-cb.co.uk | Nicole.Elliot@mhcb.co.uk

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