EUR
Comment: Breaking above the top of the ‘triangle’ and the second only daily close above 1.4200 this year. Something similar is happening in AUD, GBP and NZD, adding weight to our view that we are facing generalised USD weakness in H2 2009. Weekly closes through key chart levels are essential to add weight to our view.
Strategy: Attempt longs at 1.4200, adding to 1.4145; stop well below 1.4040. Short term target 1.4250, then this year’s high at 1.4339.
EUR/JPY
Comment: Stalling against the 61% Fibonacci resistance and the top of the Ichimoku ‘cloud’. Watch for more signs of topping today and tomorrow for a drop back down to the bottom of the ‘cloud’ by Friday.
Strategy: Attempt small shorts at 133.65; stop above 135.25. Short term target 133.00, then 132.00.
GBP
Comment: Testing the upper edge of a ‘triangle’ formation. Cable is not overbought and momentum is zero. Also watch AUD and NZD for signs of breaking to new recent highs, followed by CAD, CHF and SGD.
Strategy: Attempt small longs at 1.6500, adding to 1.6350; stop below 1.6155. First target 1.6550 then 1.6600/1.6650.
JPY
Comment: Yesterday’s ‘shooting star’ candle ahead of the 26-day moving average around Fibonacci retracement resistance and a sort of ‘neckline’ is welcome. It adds weight to our view that the market is looking for direction and that we are setting up for a re-test of this month’s low at 91.73. We shall continue to watch for signs of topping today, a drop below 93.00 adding considerable downside pressure.
Strategy: Attempt shorts at 94.00, adding to 94.45; stop above 94.85. Cover between 93.00 and 92.50.
