EUR
Comment: Disappointing as the Euro is slapped down from the 26-day moving average and now lies back inside the downward-sloping ‘wedge’ formation. Be careful because as and when sentiment shifts moves could be very large and indiscriminate.
Strategy: Attempt longs at 1.2700; stop well below 1.2600. First target 1..2740 then 1.3000.
EUR/JPY
Comment: Cautiously probing the rather thin Ichimoku ‘cloud’. Expect a break higher today with a squeeze above 122.20, roughly the mid-point of the band that has held since October, should set off a new wave of short covering.
Strategy: Attempt longs at 121.00, adding to 120.00; stop well below 119.00. First target 121.90 then 123.45.
GBP
Comment: Holding up better than some other currencies as it gingerly re-tests trendline resistance and a very thin Ichimoku ‘cloud’. In what could be a terribly explosive move, and in complete contrast to the cautious dips we have seen since November, we expect a break higher today (hopefully) and one must prepare for daily rallies of several cents.
Strategy: Buy at 1.4515, adding to 1.4400; stop below 1.4150. Short term target 1.4660 then 1.4985.
JPY
Comment: Tricky as we close yesterday exactly at January’s high at 94.65, pushing on again today a little sooner than we had expected. This is probably more to do with the amount of positions that are completely the wrong way round than anything inherently wrong with Japan. The US dollar is overbought but bullish momentum is stronger than we had expected at this point. There is still a chance that this might be an ‘extension’ but some time in March we continue to favour a squeeze to 98.00 or so.
Strategy: Attempt tiny longs at 95.25, adding to 94.65; stop well below 94.00. First target 95.45/95.75, maybe 97.45.
