EUR
Comment: Yet more bad news about Eurozone banks is doing the Euro no favours. It continues to trade in a tiny range around 1.2900 and we should expect more of the same this morning, then looking for direction this afternoon with ‘spikes’ outside the recent range both to the downside and the upside.
Strategy: Attempt longs at 1.2925; stop below 1.2750. Add to longs above 1.3125 for 1.3200.
EUR/JPY
Comment: Bumping along the very bottom of the range since October despite a couple of ‘spike lows’. Expect it to try and hold above 114.00 again today, noting that the Ichimoku ‘cloud’ has become very thin.
Strategy: Attempt longs at 114.70/114.00; stop below 112.00. Target 117.00.
GBP
Comment: Consolidating below the downward-sloping ‘wedge’ formation, Friday’s low at 1.3500 Cable’s lowest since September 1985 which was a period of massive FX turmoil culminating in the ‘Plaza Accord’ on the 22nd of that month. Caution is warranted as sub-1.3500 Cable only traded for 12 months from Sep 1984 to 1985. Watch for ‘false breaks’. On the Bank of England Trade Weighted measure it is still clinging just above December’s all-time
Strategy: Possibly attempt longs at 1.3620; stop well below 1.3500. First target 1.3800, then 1.4000.
JPY
Comment: Still hovering unsteadily around 88.50, with a potential ‘double bottom’ at 87.10. The Yen is very strong here and against a raft of other currencies and the authorities will be very reluctant to see it strengthen much further and for much longer. Allow for more work between 88.00 and 90.00 today.
Strategy: Trade the range between 88.00 and 90.00 keeping an open mind.
