EUR
Comment: Bouncing neatly from the 38% Fibonacci retracement and the 9-day moving average sneaking up to 1.3790. There is a small chance of getting a weekly close above 1.4100 this week which should increase bullish momentum although serious stops are unlikely to be triggered until we see a close above 1.4200.
Strategy: Buy at 1.4000, adding to 1.3900; stop well below 1.3790. Short term target 1.4050, then a lot more with a first measured target at 1.4200 then 1.4550.
EUR/JPY
Comment: Difficult as some Yen crosses break to new highs for the year (BRL/JPY, CAD/JPY, GBP/JPY and NZD/JPY) while others remain within the broad bands established late last year. We tend to favour a slow sideways move over the next week or two, here and in a whole range of other Yen crosses, but will be quick to review as necessary.
Strategy: Possibly attempt tiny shorts at 135.30; stop above 135.75. Short term target 132.00.
GBP
Comment: Pushing higher again where a weekly close above 1.6100 will probably set off another round of serious short-covering. Open interest is still roughly half the 2007/2008 peaks. Implied volatility is likely to trade higher next week.
Strategy: Buy at 1.6035, adding to 1.5950; stop well below 1.5750. Add to longs on a sustained break above 1.6100 for 1.6200 short term, then 1.6500.
JPY
Comment: Difficult and messy as we push into the middle of a very large Ichimoku ‘cloud’. Hopefully the rally will stall around the 26-day average at 96.83, under yesterday’s high at 97.24. Note that momentum is neutral and open interest is just off its lowest in five years.
Strategy: Attempt small shorts at 96.50, adding to 97.00; stop above 97.35. First target 96.00, then 95.00.
