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Daily Technical Analysis

EUR: Possibly attempt small longs at 1.3900

Wed, Jul 8 2009, 06:18 GMT
by Nicole Elliott

Mizuho Corporate Bank  |  View company's profile


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EUR

Comment: Poised at the top of a large Ichimoku ‘cloud’ and the risk is that we will drift into it. Last year’s experiences in the markets are still fresh in investor’s minds and the knee-jerk reaction when equities slide is to buy Treasuries, Yen and US dollars. This is not necessarily the correct thing to do so re-thinking and repenting at leisure afterwards is a possibility. Proceed with caution.

Strategy: Possibly attempt small longs at 1.3900; stop below 1.3800. Short term target 1.4050.


EUR/JPY

Comment: Breaking below trendline support and a thin Ichimoku ‘cloud’, moving averages suggesting a short position. Allow for some hesitation around 131.00 this morning prior to another slide lower later this week and maybe for the next three.

Strategy: Sell at 131.00 but only if prepared to add to 133.00; stop above 134.25. Short term target 130.00, then the 127.00 area.


GBP

Comment: Dropping towards Fibonacci support and an increasingly large, upward-sloping Ichimoku ‘cloud’. Let’s see how Cable reacts here and ahead of June’s low at 1.5800.

Strategy: Possibly attempt small longs at 1.6050; stop below 1.6000. First target 1.6400, then 1.6600.


JPY

Comment: The Ichimoku ‘cloud’ and the moving averages have pushed the US dollar lower and we are currently testing trendline support. A weekly close below 94.00 should tip the precarious balance causing a rush down to 89.00 and probably the key 85.00/87.00 points. We warn that the threat of verbal or actual intervention at this point is extremely high.

Strategy: Attempt shorts at 94.25 but only if prepared to add to 95.25; stop above 96.25. Add to shorts on a sustained break below 94.00 for 93.85/93.55 short term, then lower still.

Published on  Wed, Jul 8 2009, 06:22 GMT


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

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