EUR
Comment: Retreating from the top of a downward-sloping ‘wedge’ formation on rumours of a Russian $400B bank aid package. Only on a sustained break above 1.3300 will momentum turn bullish and life get a bit more interesting.
Strategy: Attempt longs at 1.2870; stop well below 1.2700. First target 1.3000, then 1.3100.
EUR/JPY
Comment: Consolidating under the 26-day moving average and a thin Ichimoku ‘cloud’. Late this week, or later this month we favour a break above the recent high at 120.04 towards the middle of the broad band which has held since October.
Strategy: Attempt longs at 117.75; stop below 114.00. First target 120.00, then 123.00.
GBP
Comment: Gingerly testing trendline resistance and the bottom of a rapidly thinning Ichimoku ‘cloud’. In order to get above retracement resistance at 1.5088 it will need help from other currencies. Today Cable should try and consolidate at these higher levels.
Strategy: Attempt longs at 1.4870 but only if prepared to add to 1.4500; stop below 1.4000. Short term target 1.4975/1.5000. Serious re-thinking will only take place above 1.5500.
JPY
Comment: Re-drawing the upper line, which now lies in the middle of in a fairly thick Ichimoku ‘cloud’, suggests more work between 90.87 and 92.50 again today. As we forecast at the beginning of the year, we continue to feel that there will not be a clear trend to the USD/JPY and that we shall face an extended period of difficult broadly sideways moves in a range that is yet to be established.
Strategy: Attempt tiny shorts at 91.50; stop/reverse above 92.55 for 94.00. Cover shorts ahead of 90.00 and watch for signs of basing between here and 89.00.
