EUR
Comment: Trying to hold above 1.4200 but yesterday’s ‘doji’ shows it’s not quite there yet and really needs a weekly close above this point for bullish momentum to kick in hard. Something similar is happening in AUD, GBP and NZD, adding weight to our view that we are facing generalised USD weakness in H2 2009.
Strategy: Buy at 1.4200, adding to 1.4165; stop well below 1.4040. Short term target 1.4250, then this year’s high at 1.4339, a lot more later on.
EUR/JPY
Comment: Stalling again against the 61% Fibonacci resistance and the top of the Ichimoku ‘cloud’. Watch for yet more signs of topping today for a drop back down to the bottom of the ‘cloud’ by Friday. A close below here should add downside pressure for a sudden slide back down to pivotal support between 126.00 and 128.00.
Strategy: Sell at 133.00, adding to 133.45; stop above 134.85. Add to shorts on a sustained break below 132.25 for 131.50 short term and then 127.00.
GBP
Comment: Retreating from the upper edge of a ‘triangle’ formation as the pound lags behind some other currencies. 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 1.6365; stop below 1.6155. First target 1.6550 then 1.6600/1.6650.
JPY
Comment: The ‘shooting star’ candle has pushed the US dollar back down below the sort of ‘neckline’, consolidating below the 38% Fibonacci resistance between the 9 and 26-day moving averages. Allow for a little more consolidation above yesterday’s low at 93.27 this morning, then lower still late this afternoon or tomorrow. A drop below 93.00 adds considerable downside pressure, dragging Yen crosses lower.
Strategy: Attempt shorts at 93.65, adding to 94.45; stop above 94.85. Add to shorts on a sustained break below 93.00 for 92.50 and then this month’s low at 91.70.
