EUR
Comment: Nothing to add as we hover above the ‘neckline’ of a potential ‘head-and-shoulders’, between the moving averages. We remind that there is a high probability of this formation not going to plan as further out we see it as a process of trying to form a new interim low, probably somewhere between 1.3800 and 1.3600. Watch AUD, GBP, and NZD which are closer to a potential upside break.
Strategy: Attempt small longs at 1.3935; stop well below 1.3740. Short term target 1.4050.
EUR/JPY
Comment: Same as it was yesterday, hovering in the middle of the broad range established in March this year and trading between the moving averages. We shall continueto allow for yet more hesitation around here today. Next week we shall allow for a test of the Ichimoku ‘cloud’.
Strategy: Attempt small shorts at 134.65; stop above 136.00. Short term target 133.00.
GBP
Comment: Incredible how neatly Cable is holding above the 9-day moving average, increasing the likelihood of a re-test of this month’s high at 1.6664 even as early as the end of this week. Several other major currencies are behaving in a similar way lending support to our view that we are currently in the process of trying to form a new interim low setting up for more generalised US dollar weakness in Q3.
Strategy: Attempt small longs at 1.6345; stop well below 1.6200. First target 1.6500, then 1.6600 and more long term.
JPY
Comment: Little to add as we hover around 95.65 as expected. Allow for more of the same today, where only a weekly close below 94.00 will add to downside pressure, something that is unlikely today.
Strategy: Possibly attempt small shorts at 96.65/97.00; stop above 97.65. First target 95.65/95.50, re-selling on a sustained break below here for 94.00.
