EUR
Comment: Breaking above the Ichimoku ‘cloud’ having bounced from retracement support. The Euro is not overbought and momentum is clearly bullish. A sustained break above last month’s high at 1.3739 should see another round of short-covering send it back up towards 1.4400.
Strategy: Attempt longs at 1.3655 but only if prepared to add to 1.3400; stop below 1.3250. Add to longs on a sustained break above 1.3800 for 1.4000 and then more.
EUR/JPY
Comment: Last week’s strongest weekly close since October, following the previous week’s ‘spike high’ has forced us to review our outlook. It suggests the rally might continue on for another week or two targeting 140.00/142.00, even though the Euro is already somewhat overbought against the Yen.
Strategy: Attempt small longs at 136.75, adding to 134.00; stop below 130.00. Add to longs on a sustained break above 137.15 and again above 138.65 for 140.00, probably 142.00.
GBP
Comment: Strong steady gains as we break above the downward-sloping ‘wedge’ and the Ichimoku ‘cloud’. A sustained break above 1.5000 should set off another round of serious short-covering.
Strategy: Buy at 1.4940; stop below 1.4400. Short term target 1.4980, then 1.5375.
JPY
Comment: Over the last month only the Yen has weakened against the US dollar, with emerging markets currencies recovering the most after being hardest hit earlier this year. Some are getting very excited by the fact the Yen has rallied over the psychological 100.00 level for the first time since November (high 100.56). Last week’s close just above 100.00 suggests another brief squeeze higher still, to 102.00 and possibly even as high as 106.50.
Strategy: Attempt small longs at 100.85; stop below 99.00. Cover ahead of 102.20.
