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Daily Technical Analysis

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EUR: Possibly attempt small longs at 1.4750; stop below 1.4650

Mon, Nov 2 2009, 07:37 GMT
by Nicole Elliott

Mizuho Corporate Bank

EUR

Comment: Hovering around Fibonacci support as we consolidate under this year’s high, wondering which exactly is this year’s currency of choice when leveraging or de-leveraging. Allow for more of the same today and slow work all week. At-the-money implied volatility might pick up this month.

Strategy: Possibly attempt small longs at 1.4750; stop below 1.4650. Short term target 1.4855, maybe 1.4900.

EUR/JPY

Comment: Plunging below the Ichimoku ‘cloud’ as all Yen crosses are hit hard. This week we shall see a series of downside tests of trendline support here and in all the others too. Note that momentum has yet to turn bearish and the Euro is currently not oversold against the Yen. Implied volatility has picked up and could trade a lot higher.

Strategy: Attempt shorts at 132.80 but only if prepared to add to 134.00; stop above 136.00. Short term target 132.00, then 131.00, eventually another big slide lower still.

GBP

Comment: Sterling is trapped below important resistance around 1.6665 and support from the growing Ichimoku ‘cloud’ and Fibonacci retracement. This should dominate again this week so that Cable moves less than other currencies, the pound gaining against some of these though not keeping up with the Yen which should again be one of the stronger currencies this month.

Strategy: Attempt small longs at 1.6395; stop well below 1.6200. First target 1.6600/1.6665.

JPY

Comment: The very large Ichimoku ‘cloud’ has pushed this pair down below the 26-day average at 90.17. The US dollar is still not oversold and momentum has yet to turn bearish so plenty of further downside pressure left over for this month. Good futures volume on declining open interest suggests any are bailing out. Expect repeated cautious downside testing of a series of key support levels between 89.00 and 87.00 this month, then lower to key 85.00.

Strategy: Attempt shorts at 90.00, adding to 90.50; stop above 91.65. Short term target 89.25, then 88.50.

• Download Full EUR Technical Analysis
• Download Full EUR/JPY Technical Analysis
• Download Full GBP Technical Analysis
• Download Full JPY Technical Analysis

Published on  Mon, Nov 2 2009, 07:45 GMT