EUR
Comment: Closing just below the ‘neckline’ of a potential ‘head-and-shoulders’ formation and below the moving averages. Nevertheless we still feel that an interim will low will form this week or next somewhere between 1.3800 and 1.3600 retracement support because we are mapping out an A, B, C-type correction.
Strategy: Possibly attempt small longs at 1.3825; stop well below 1.3740. Short term target 1.4050.
EUR/JPY
Comment: Dropping a lot faster than expected to the 26-day moving average. This is a perennial feature of Yen crosses, where rallies are slow and grudging while drops can be very fast indeed. If the broad range so far this year is roughly 126.00 to 138.00, then 132.00 is the mid-point, so expect hesitation around here today. Later this week or next week we shall allow for a test of the Ichimoku ‘cloud’.
Strategy: Attempt small shorts at 133.10 but only if prepared to add to 135.00; stop above 136.00. Short term target 132.00/131.70, maybe 130.00.
GBP
Comment: Doing better than many currencies, consolidating under a potential ‘double top’, clinging to the 9-day moving average. We shall allow for more consolidation under 1.6600 this week, but expect a new interim base to form around the 1.6000 area (1.5800 would be ideal).
Strategy: Possibly attempt small longs at 1.6290; stop well below 1.6200. First target 1.6430.
JPY
Comment: Plunging below a thin Ichimoku ‘cloud’ and below moving averages. Yen crosses are also dropping sharply which might increase downside momentum here. Allow for a possibly dramatic spike to 95.65.
Strategy: Possibly attempt small shorts at 96.25 but only if prepared to add to 97.50; stop above 98.65. First target 96.00, maybe 95.65.
