EUR
Comment: Cautiously creeping higher and consolidating at the 61% retracement level. Short covering is likely on a sustained break above 1.3260/1.3300 and should allow to Euro to push up to the bottom of the Ichimoku ‘cloud’ at 1.3525.
Strategy: Buy at 1.3240, adding to 1.3075; stop below 1.2850. Add to longs above 1.3330 for 1.3525 short term.
EUR/JPY
Comment: Cautiously probing trendline resistance around 119.00 as investors decide whether we are in a small corrective bounce or whether the break below 113.60 was an ‘extension’. We favour the latter and therefore and this cross should continue to hold within the broad range established since October. Dips towards 115.00 are seen as buying opportunities for a squeeze into the middle of the range around 122.50, then more.
Strategy: Strategy remains unchanged: buy at 118.00 but only if prepared to add to 115.00; stop below 113.50. Target 120.00, then 122.00.
GBP
Comment: This chart looks similar to that of many Yen crosses. We have rallied back up to the lower edge of the downward-sloping ‘wedge’ formation and the question now is whether we move back inside the formation. If we do, as we think Cable should, then the drop to 1.3500 can be labelled an ‘extension’ to the massive drop of the last five months.
Strategy: Buy at 1.4260, adding to 1.4000; stop well below 1.3800. Add to longs on a sustained break above 1.4440 for 1.4600 short term, eventually 1.5000.
JPY
Comment: Creeping unsteadily sideways, with a potential ‘double bottom’ at 87.10, and we still feel prices ought to move up to 91.000. The pace should pick up a little on a sustained break above 90.00, and the longer we hold above the 88.50 area the sooner the squeeze higher.
Strategy: Buy at 89.15, adding to 88.50; stop below 87.80. Add to longs on a sustained break above 90.25 for 91.00.
