EUR
Comment: Yesterday’s small ‘doji’ against important resistance at 1.4200 suggests consolidation around here today. The Euro is overbought but bullish momentum is at a record high, and implied volatility looks set to edge higher.
Strategy: Buy at 1.4135, adding to 1.4000; stop well below 1.3900. Short term target 1.4200/1.4250, then a lot more with a first measured target at 1.4550.
EUR/JPY
Comment: Re-testing April’s high though a few other Yen crosses have edged up to new highs for this year. This and other pairs may follow, or if they do not then they might drag the others down again. All very difficult and subject to change at short notice.
Strategy: Possibly attempt small shorts at 136.15; stop above 137.55. Short term target 134.00.
GBP
Comment: Soaring, partly because chart levels between 1.6000 and 1.7000 are myriad but poor. The pound is now back to where it was in November on the Bank of England’s Trade Weighted basis. One-month at-the-money implied volatility has risen to 16.00% and is expected to squeeze to 20.00%.
Strategy: Buy at 1.6375, adding to 1.6200; stop below 1.6000. Add to longs on a sustained break above 1.6500 for 1.6800, maybe 1.7000.
JPY
Comment: Thrashing around just under the middle of a very large Ichimoku ‘cloud’ and below the 26-day moving average at 96.83, at the 50% Fibonacci area. Expect more of the same today, where the Yen will not follow what other currencies are doing. This should see implied volatility pick up further.
Strategy: Attempt small shorts at 96.25; stop above 97.35. First target 95.00, eventually 94.00.
