EUR
Comment: Bouncing ahead of the 38% Fibonacci retracement of the most recent rally and closing above the 9-day moving average. This is seen as part of the process of re-grouping this week for another re-test of increasingly important resistance around 1.3700. Note that above here there are no really strong resistance levels until the 1.4200 area.
Strategy: Buy at 1.3555, adding to 1.3465; stop below 1.3400. Short term target 1.3700, then a lot more.
EUR/JPY
Comment: Yesterday’s bounce feels especially strong because it was on one day only. Having retraced 50% of last week’s decline we expect the cross to stall and top slowly between here and the top of the Ichimoku ‘cloud’. This pair should then retreat to the 126.00 area, maybe more, very late this week or more likely next week.
Strategy: Sell at 130.55; stop above 132.00. Add to shorts on a sustained break below 126.85 for 126.40/126.40, maybe 124.50.
GBP
Comment: The strongest daily close since mid-December as the 9-day moving average helps Cable up half a notch. This adds weight to our view that we are setting up for an important break higher after trading between 1.3500 and 1.5500 since mid-November.
Strategy: Buy at 1.5335, adding to 1.5150; 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: Bouncing from the bottom of the Ichimoku ‘cloud’, retracing 38% of the most recent drop. Now watch for signs of topping, probably between 96.65 and 97.25. Then back down to re-test the bottom of the ‘cloud’.
Strategy: Sell 96.45; stop above 98.00. Add to shorts below 94.50 for 93.55.
