EUR
Comment: Poised at the top of a large Ichimoku ‘cloud’ and the risk is that we will drift into it. Last year’s experiences in the markets are still fresh in investor’s minds and the knee-jerk reaction when equities slide is to buy Treasuries, Yen and US dollars. This is not necessarily the correct thing to do so re-thinking and repenting at leisure afterwards is a possibility. Proceed with caution.
Strategy: Possibly attempt small longs at 1.3900; stop below 1.3800. Short term target 1.4050.
EUR/JPY
Comment: Breaking below trendline support and a thin Ichimoku ‘cloud’, moving averages suggesting a short position. Allow for some hesitation around 131.00 this morning prior to another slide lower later this week and maybe for the next three.
Strategy: Sell at 131.00 but only if prepared to add to 133.00; stop above 134.25. Short term target 130.00, then the 127.00 area.
GBP
Comment: Dropping towards Fibonacci support and an increasingly large, upward-sloping Ichimoku ‘cloud’. Let’s see how Cable reacts here and ahead of June’s low at 1.5800.
Strategy: Possibly attempt small longs at 1.6050; stop below 1.6000. First target 1.6400, then 1.6600.
JPY
Comment: The Ichimoku ‘cloud’ and the moving averages have pushed the US dollar lower and we are currently testing trendline support. A weekly close below 94.00 should tip the precarious balance causing a rush down to 89.00 and probably the key 85.00/87.00 points. We warn that the threat of verbal or actual intervention at this point is extremely high.
Strategy: Attempt shorts at 94.25 but only if prepared to add to 95.25; stop above 96.25. Add to shorts on a sustained break below 94.00 for 93.85/93.55 short term, then lower still.
