technical analysis will be away until wednesday 8th april
EUR
Comment: Shock and awe. Look and weep at the power of a downward-sloping ‘wedge’ formation, here and similarly in several other markets. The Ichimoku ‘cloud’ may try and cap today but note that a weekly close above 1.3500 is likely because momentum is already strongly bullish. This in turn could lead to a squeeze back up to 1.4400 by month-end.
Strategy: Attempt longs at 1.3630 but only if prepared to add to 1.3500; stop below 1.3250. Add to longs on a sustained break above 1.3800 for 1.4000 and then more.
EUR/JPY
Comment: We repeat: 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 one-month at-the-money implied volatility close to the lowest in six months.
Strategy: Attempt small shorts at 129.15/129.75; stop above 130.55. Add to shorts below 128.00 for 127.00 and maybe 125.55.
GBP
Comment: The worst performing currency against the US dollar so far this month, up just 0.87%. Closing above the downward-sloping ‘wedge’ and stalling against the Ichimoku ‘cloud’. Expect some hesitation at current levels today, where only a weekly close above 1.5000 setting off another round of serious short-covering.
Strategy: Buy at 1.4445, adding to 1.4300; stop below 1.4100. Short term target 1.4600, then 1.4900.
JPY
Comment: Tumbling towards 93.00 (low 93.55 yesterday) a lot faster than we had expected as the mirage of US dollar strength is seen for what it is. Momentum has turned bearish and while the US dollar is not oversold, we shall probably consolidate above 93.55 today. However, if generalised US dollar selling continues today, as it probably will next week, then allow for a slide to 90.00 which should hold on a first attempt at the very least.
Strategy: Attempt small shorts 94.65 but be prepared to add to 96.00; stop well above 96.65. Add to shorts on a sustained break below 93.30 for 92.00.
