EUR
Comment: As we had warned last week, the potential ‘head-and-shoulders’ has a strong chance of not panning out as it should. Yesterday’s close above 1.4050 adds weight to our view, has added to implied volatility,
Strategy: Attempt small longs at 1.4075; stop below 1.3800. Short term target 1.4145, then 1.4230.
EUR/JPY
Comment: Bouncing more strongly than we had allowed for from the middle of the range that has held since March and trendline support. Expect hesitation at current levels today and maybe all week, with a break lower postponed until at least next week.
Strategy: Possibly attempt small shorts at 134.30; stop above 135.50. Short term target 133.00, then 132.00.
GBP
Comment: Holding around the 9-day moving average as Cable prepares for an imminent upside test. The chart pattern looks increasingly like ‘triangle’ consolidation, maybe a ‘pennant’, and the idea of a potential ‘double top’ fading fast. A weekly close above 1.6600 is needed to take bullish momentum back up to the very strong levels of early June.
Strategy: Attempt small longs at 1.6460, adding to 1.6300; stop below 1.6050. First target 1.6500, then 1.6600 and more long term.
JPY
Comment: Consolidating at some of the lowest levels since March, in the middle of the range so far this year. Price action since March looks increasingly top-heavy and momentum has just turned bearish, downside pressure increasing if prices hold below the 96.50 area. If not this week then within the next three we favour a test of trendline support (and eventually a break below here).
Strategy: Sell at 95.50, adding to 96.00; stop above 97.35. First target 95.00, then 94.55.
