EUR
Comment: Please, do something so that we break out of the interminable downward-sloping ‘wedge’ formation by the weekend. Let’s see if the Euro can rally to the moving averages and trendline resistance around 1.2775.
Strategy: Attempt longs at 1.2650; stop below 1.2450. Add to longs on a sustained break above 1.2700 for 1.2775/1.2800 and then 1.3000.
EUR/JPY
Comment: Consolidating at current levels, not helped by the EBS trading system going down yesterday afternoon. With a little luck the 9-day moving average might give it a little push higher for a squeeze back up towards 126.00.
Strategy: Buy at 123.55; stop below 121.50. Add to longs on a sustained break above 126.25 for 128.45 and probably 130.00.
GBP
Comment: Bravely picking itself up off the bottom of the downward-sloping ‘wedge’ formation, but just when the Ichimoku ‘cloud’ got wide again. This might slow down rallies over the next few days allowing other major currencies to pull their weight this time round.
Strategy: Attempt longs at 1.4260; stop below 1.3950. Short term target 1.4300 then 1.4600.
JPY
Comment: Not only do we have to deal with very jittery markets but to cap it all one of the ‘toys’ breaks down and global business comes to a juddering halt between 14:30 and the 15:00 fixing (GMT). Today’s dip below 98.00 may mean we have to review our medium term view that we only revised yesterday. Rather than seeing this as lack of conviction we see it as a symptom of an FX market that is likely to reverse and turn on a dime. Be flexible.
Strategy: Allow for sideways work roughly between 97.00 and 98.50 this morning and maybe all day. A sustained break below 97.00 (ideally a close below here) targets 94.50.
