EUR
Comment: Consolidating in a neat little range just under this year’s highs (1.3801 on the 8th January and 1.3739 on the 19th March). It is just a matter of time before we rally through here, with the Swiss franc snapping close on the Euro’s heels, behind the Yen. One-month at-the-money implied volatility appears to have based at the pivotal 13.00% area and is now expected to pick up towards 19.00%.
Strategy: Buy at 1.3550; stop below 1.3400. Add to longs on a sustained break above 1.3750 for 1.3800 and then 1.4000.
EUR/JPY
Comment: Hovering at the 50% Fibonacci retracement of the most recent rally in the middle of a very large Ichimoku ‘cloud’. Chikou Span has dropped below the moving averages which help to turn momentum bearish. Eventually we favour a drop to the 126.00 area, maybe more.
Strategy: Attempt shorts at 129.50, adding to 131.00; stop above 134.85. Add to shorts on a sustained break below 128.00 for 126.40.
GBP
Comment: Consolidating fairly neatly, is not overbought and momentum is steadily bullish. We expect January’s high at 1.5375 8th January to be tested some time this week, with the 9-day moving average at 1.5095 hopefully helping to push it up to here. Another round of buy stops is likely above 1.5500.
Strategy: Buy at 1.5125; stop well below 1.5000. Add to longs on a sustained break above 1.5375 for 1.5500 short term and then 1.5725/1.5800.
JPY
Comment: Dropping quickly to the bottom of a large Ichimoku ‘cloud’ and will probably try and hold above here this morning, maybe all day. The move adds weight to our view that price action since February is some sort of irregular ‘head-and-shoulders’ top and because many Yen crosses look similar the Yen should outperform most currencies over the next month or so. If not today then next week we favour a re-test of the 50% Fibonacci retracement at 94.25 and the March low at 93.55.
Strategy: Attempt shorts on a bounce to 96.00, adding to 96.70; stop above 98.00. Add to shorts below 95.00 for 94.25, possibly 93.55.
