EUR
Comment: Consolidating slightly unsteadily above the top of the ‘cloud’ and the nine-day moving average, though lagging Pacific rim currencies. Similar patterns can be seen in a series of major currencies suggesting generalised US dollar weakness this month, probably a lot longer than that. Eventually the Euro should be dragged higher by the others.
Strategy: Buy at 1.3300, adding to 1.3245; stop below 1.3090. Add to longs on a sustained break above 1.3450 for 1.3575/1.3600 and more further out.
EUR/JPY
Comment: Conflicting messages from the Ichimoku ‘cloud’ and the chart pattern. We feel the latest move might stall around the 133.00 area for a small retreat towards 126.00, but be prepared to be very flexible and tear up strategies at short notice.
Strategy: Attempt small shorts at 131.15, adding to 132.00; stop above 134.50. Add to shorts on a sustained break below 129.75 for 128.85 and maybe 126.65.
GBP
Comment: Consolidating at the very top of this year’s trading band and because we have held in such a tiny range for the last two days a break higher is imminent. Expect another squeeze higher this week and maybe all month, increasing as more currencies start seriously pulling in the same direction. Funny how silent all the voices trashing UK plc have become, and consensus opinion now is that Sterling is undervalued.
Strategy: Buy at 1.5145; stop below 1.4800. Add to longs on a sustained break above 1.5175 for 1.5375 short term and then 1.5725/1.5800.
JPY
Comment: Because major currencies are not gaining against the US dollar, but smaller ones are, this has not lit up on many investors’ radar. We continue to favour generalised US dollar weakness this year, something which may help to cap USD/JPY below 99.50. Today we favour a drop to the 9-day moving average at 97.60 and probably the top of the Ichimoku ‘cloud’ this weekend.
Strategy: Attempt shorts at 98.55, adding to 99.00; stop above 99.85. Short term target 97.65, maybe 97.15.
