EUR
Comment: Bursting higher in classic fashion from the downward-sloping ‘wedge’ formation, making up for wasted time. The Ichimoku ‘cloud’ may cap this week but note that a weekly close above 1.3500 is likely because momentum is already strongly bullish.
Strategy: Buy at 1.3455 but only if prepared to add to 1.3325; stop below 1.3000. Add to longs on a sustained break above 1.3555 and again above 1.3645 for 1.4000.
EUR/JPY
Comment: While we cannot rule out another two weeks of cautious upside testing, it would appear that we are likely to stall at the top of the band that has held since October. The Euro is overbought and bullish momentum not nearly as strong as one would expect.
Strategy: Attempt small shorts at 128.35, adding to 129.75; stop above 130.55. Add to shorts below 128.00 for 127.00 and maybe 125.55.
GBP
Comment: Closing above the 9-day and 26-day moving averages though still within the downward-sloping ‘wedge’ as the pound trails badly because it is seen as the sickest and most vulnerable to financial turmoil. A narrower Ichimoku ‘cloud’ suggests prices will eventually manage a squeeze higher.
Strategy: Buy at 1.4215, adding to 1.4000; stop below 1.3800. Short term target 1.4385, eventually 1.4600.
JPY
Comment: Closing below the 97.00 area with a very large ‘bearish engulfing’ candle. This has turned momentum bearish, which should increase with a weekly close below 96.00. This should set off the drop to 93.00 that we had warned of two weeks ago.
Strategy: Attempt small shorts 95.50, adding to 96.50; stop well above 97.00. Add to shorts on a sustained break below 94.75 for 93.50/93.00.
