EUR
Comment: Capped almost too neatly below the increasingly important resistance around 1.3700. Note that above here there are no really strong resistance levels until the 1.4200 area. Perhaps the rising 9-day moving average might help push it up through here, dragged higher by other currencies which are leading this move.
Strategy: Buy at 1.3590, adding to 1.3465; stop below 1.3400. Short term target 1.3700, then a lot more.
EUR/JPY
Comment: A small ‘shooting star’ candle against the top of the Ichimoku ‘cloud’ which also coincides with the 61% Fibonacci retracement of the most recent decline. This adds weight to our view that yen crosses are forming a new interim high and will eventually trade lower, this pair to the 126.00 area, maybe more, very late this week or more likely next week.
Strategy: Sell at 129.90, adding to 131.50; stop above 132.00. Add to shorts on a sustained break below 126.85 for 126.40/126.40, maybe 124.50.
GBP
Comment: Gathering upside pressure despite political sleaze. Momentum has yet to turn decidedly bullish as we unwind the record downside pressure built between October and November.
Strategy: Buy at 1.5455, adding to 1.5250; stop below 1.5050. Add to longs on a sustained break above 1.5535 for 1.5700 short term and then 1.5800/1.5885.
JPY
Comment: Dropping neatly from the first Fibonacci and what is now trendline resistance. It is possible that we have already formed an interim high and we have already started the descent to re-test the bottom of the ‘cloud’ which might hold on a first attempt but then we favour a break lower still.
Strategy: Sell 95.55, adding to 96.00; stop well above 96.75. First target 94.50, then 93.55.
