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Daily Technical Analysis

EUR: Possibly attempt small longs at 1.3880; stop well below 1.3740

Wed, Jun 17 2009, 06:33 GMT
by Nicole Elliott

Mizuho Corporate Bank  |  View company's profile


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EUR

Comment: Hovering above the ‘neckline’ of a potential ‘head-and-shoulders’ formation in what we see as a process of trying to form a new interim low, probably somewhere between 1.3800 and 1.3600. This is expected to be a slow complex process ending an A, B, C-type correction which may take about two weeks.

Strategy: Possibly attempt small longs at 1.3880; stop well below 1.3740. Short term target 1.4050.


EUR/JPY

Comment: Yen crosses drop this week as a knee-jerk reaction to weakness in equity indices. This pair is in the middle of the broad range established in March this year trying to cling to the 26-day moving average. We shall continue to allow for more hesitation around here today. Later this week or next week we shall allow for a test of the Ichimoku ‘cloud’.

Strategy: Attempt small shorts at 134.00 but only if prepared to add to 135.00; stop above 136.00. Short term target 132.55, maybe 131.70.


GBP

Comment: The big question this week is whether cable has a potential ‘double top’ or whether this is ‘triangle’ consolidation. We favour the latter, here and in a series of other currencies, but at the moment the jury is out. The fact that it is clinging to the 9-day moving average supports our view and obviously a close above 1.6600 triggers the next round of short-covering.

Strategy: Attempt small longs at 1.6435, adding to 1.6350; stop well below 1.6200. First target 1.6500, then 1.6600 and more long term.


JPY

Comment: Consolidating below a thin Ichimoku ‘cloud’ while trying to cling to the 26-day moving average. Yen crosses are also dropping and might increase downside momentum here. Allow for more nervous sideways work today with the possibility of a dramatic spike to 95.65 some time this week.

Strategy: Attempt small shorts at 96.60 but only if prepared to add to 97.50; stop above 98.65. First target 96.00, maybe 95.65, re-selling on a sustained break below here for 94.00.

Published on  Wed, Jun 17 2009, 06:40 GMT


Mizuho Corporate Bank http://www.mizuho-cb.co.uk | Nicole.Elliot@mhcb.co.uk

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