EUR
Comment: Still trying to base against the top of a massive Ichimoku ‘cloud’ and note that the Lagging Span also has ‘cloud’ support. It is just a question of time before we see a sustained break above the 9-day moving average at 1.3765 which will probably trigger some short-covering allowing the Euro to sneak back up to 1.4100.
Strategy: Buy at 1.3675, adding to 1.3550; stop below 1.3400. Add to longs above 1.3850 for 1.4000.
EUR/JPY
Comment: Edging a tiny bit lower but still in the middle of a very large Ichimoku ‘cloud’, trapped between the two moving averages, and we still expect a drop to the 26-day one at 123.45. The probably the bottom of the ‘cloud’.
Strategy: Attempt shorts at 124.65, adding to 126.00; stop above 128.55. First target 123.45, maybe 122.50.
GBP
Comment: Testing the top of the formation that has dominated since October. It should attempt an important break higher, despite a series of formidable resistance levels, with a break above 1.6000 probably setting off considerable short-covering. Note that open interest is less than half of what it was last year.
Strategy: Buy at 1.5240 but only if prepared to add to 1.5000; stop below 1.4800. Add to longs on a sustained break above 1.5400 for 1.5500 and then December’s high at 1.5725.
JPY
Comment: Dropping to the 26-day moving average with a low at 90.83, exactly where we started the year. This adds weight to our view that the rally was corrective and that the long term trend is still very much to a stronger Yen against the US dollar. For today expect some hesitation in a small range prior to a drop towards 90.00.
Strategy: Attempt shorts at 91.20 but only if prepared to add to 93.00; stop well above 93.40. First target 90.85, then 90.00.
