EUR
Comment: Even the brain dead will have to start waking up to reality following the Euro’s close above important resistance around 1.3700. A weekly close above here would add to current strong bullish momentum. Note that above here there are no really strong resistance levels until the 1.4200 area.
Strategy: Buy at 1.3775, adding to 1.3700; stop well below 1.3600. Short term target 1.3885, then a lot more with a first measured target at 1.4200 then 1.4550.
EUR/JPY
Comment: A ‘doji’ candle yesterday at the top of the Ichimoku ‘cloud’ which also coincides with the 61% Fibonacci retracement of the most recent decline signals that the market is trying to top. Bearish pressure would increase marginally were we to hold below 131.00 today.
Strategy: Sell at 130.45/130.75; stop above 132.00. Add to shorts on a sustained break below 129.50 for 128.00 short term and then 126.00.
GBP
Comment: Many are looking on in disbelief, especially considering the political situation. UK plc can run itself despite what outgoing CBI chief Martin Broughton described as the ‘economic vandalism’ instigated by PM Gordon Brown. Having met our first upside target and channel resistance around 1.5800 allow for some consolidation so that other currencies can catch up.
Strategy: Buy on a dip to 1.5700, adding to 1.5550; stop well below 1.5400. Add to longs on a sustained break above 1.5835 and again above 1.5900 for 1.6100 short term.
JPY
Comment: One of the lowest closes since February, adding weight to our view that we have formed an important interim high. Thin markets today through to Tuesday could see moves gather considerable pace, possibly gapping, to levels not seen since October/November (not JPY though). A weekly close below 94.25 should add considerable downside pressure.
Strategy: Sell 94.45 but only if prepared to add to 96.00; stop above 96.75. First target 94.20, then 93.55.
