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Daily Technical Analysis

EUR: Attempt longs at 1.4635/1.4590; stop below 1.4500

Tue, Sep 29 2009, 06:17 GMT
by Nicole Elliott

Mizuho Corporate Bank  |  View company's profile


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EUR

Comment: Correcting and consolidating, clearly above the most recent Fibonacci retracement, between the nine-day and twenty-six day averages. Allow for more sideways work today and maybe for a fortnight.

Strategy: Attempt longs at 1.4635/1.4590; stop below 1.4500. Short term target 1.4700.


EUR/JPY

Comment: Poised on trendline support below the Ichimoku ‘cloud’ and the question is: how long will it take to break below here? Note that the Euro is oversold against the Yen, and other Yen crosses are behaving differently. These must work in tandem to achieve the sudden drops we are predicting.

Strategy: Attempt shorts at 131.65; stop well above 132.00. Short term target 131.00, then 130.00.


GBP

Comment: Difficult as we trade below the ‘neckline’ of a ‘head-and-shoulders’ top and above the first longer term Fibonacci retracement support levels; these lie between 1.5700 and 1.4850. Note that the Lagging Span is trying to cling to the bottom of a good-sized Ichimoku ‘cloud’.

Strategy: Possibly attempt tiny longs at 1.5915; stop below 1.5700. Short term target 1.6100/1.6170.


JPY

Comment: A massive ‘hammer’ candle yesterday suggests prices will hold above its low at 88.23 today and probably all week. This morning the corrective bounce has been capped by the 9-day moving average at 90.39 and we may hover around here for much of today. Rallies towards 91.50 are seen as medium term selling opportunities for an eventual test of January’s low at 87.10. The US dollar is hardly oversold any more and at-the-money implied volatility should increase as prices thrash around between 87.00 and 92.00 this month.

Strategy: Attempt shorts at 89.90; stop well above 90.50. Short term target 89.15 maybe 87.50.

Published on  Tue, Sep 29 2009, 06:26 GMT


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

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