EUR
Comment: All eyes on Cable but month-to-date the Euro has lost more at 7.50% against the US dollar. Slipping through a very thin Ichimoku ‘cloud’ having given up 78.6% of December’s rally. The Euro is oversold and momentum very bearish. Looking very unstable, like many other currencies that have moved an awful lot recently.
Strategy: Stand aside if possible; if not, attempt tiny longs at 1.2925; stop below 1.2840. Target 1.3200.
EUR/JPY
Comment: Cautiously probing the downside, here and in most other Yen crosses. We expect more of the same and while it should hold again today above October’s low at 113.62 a brief break lower and ‘spike low’ some time this month cannot be ruled out. Note how thin the Ichimoku ‘cloud’ becomes early February.
Strategy: Possibly attempt tiny longs at 116.15; stop below 114.40. Target 118.75, maybe 120.75.
GBP
Comment: Falling off a cliff, below the downward-sloping ‘wedge’ formation, to a low at 1.3815, Cable’s lowest since June 2001’s 1.3682. Sweeping statements from some who should know better that there is only one way for UK plc to go and that is downhill. Surprisingly it is not as oversold as some might think and on the Bank of England’s index is holding above December’s low point as other currencies weaken too. We shall watch for an imminent ‘spike low’ possibly by the end of this week.
Strategy: Stand aside but if you really have to: attempt tiny longs at 1.3870; stop below 1.3640. First target 1.4250.
JPY
Comment: Little to add as we hover nervously in the middle of the range since December, creeping sideways into an apex under the lower edge of the Ichimoku ‘cloud’. Very difficult to see where it might go next bur overall we favour a series of random broadly sideways moves rather than any clear trends.
Strategy: Trade the range between 89.00 and 91.00 keeping an open mind.
