EUR
Comment: Pushing strongly higher and re-testing January’s high at 1.4363 (December’s ‘spike high’ was 1.4720). A sustained break above, and a weekly close over 1.4200 constitutes an important long term break forcing many to panic and flee the US dollar.
Strategy: Buy at 1.4290, adding to 1.4200; stop well below 1.4000. Short term target 1.4330/1.4360, then a lot more with a first measured target at 1.4545.
EUR/JPY
Comment: Blipping to new a high for this year at 137.57. 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. The Euro is overbought against the yen but momentum is steadily bullish.
Strategy: Possibly attempt tiny shorts at 137.30; stop well above 137.75. Short term target 134.00.
GBP
Comment: Hot on the heels of this week’s leaders, Aussie, Kiwi and Brazil, all the more extraordinary considering the political background. It just goes to show how overdone last year’s sell-off had been. It has now retraced just over 38% of the decline from 2007’s high 2.1172 and met the weekly Ichimoku ‘cloud’. This might stall the rally this week but with spectacular bullish momentum we would not bank on it.
Strategy: Attempt small longs at 1.6585 but only if prepared to add to 1.6325; stop below 1.6000. Add to longs on a sustained break above 1.6675 for 1.6800, maybe 1.7000.
JPY
Comment: Still thrashing around roughly between 95.00 and 97.00 although the daily ranges are shrinking a little. Expect more of the same today as the Yen looks for direction, where it should eventually take its lead from what other currencies are doing.
Strategy: Attempt small shorts at 95.90/96.25; stop above 97.35. First target 95.00, adding to shorts below 94.40 for 94.00 and then 93.65.
