EUR
Comment: Consolidating neatly in a tiny ‘triangle’ at the top of this year’s trading range. It is just a matter of time before it breaks higher, with a weekly close clearly above 1.4200 essential to confirm an upside break. Implied volatility should then pick up.
Strategy: Buy at 1.4235/1.4200; stop well below 1.4140. Short term target 1.4275, then this year’s high at 1.4339, a lot more later on.
EUR/JPY
Comment: Some Yen crosses have bounced by a little more than we had expected, though this one has been capped 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 134.00; stop above 134.85. Add to shorts on a sustained break below 132.00 for 131.50 short term and then 127.00.
GBP
Comment: Using microscopic Technical Analysis through rose-tinted spectacles as Cable hovers at the upper edge of a ‘triangle’ formation one can see that yesterday’s price action is a ‘doji’ with a ‘spike low’ proving that we are looking for direction and that a break higher is likely. If not today, then hopefully a weekly close above 1.6600 should kick-start a decent rally.
Strategy: Attempt small longs at 1.6365; stop below 1.6155. First target 1.6550 then 1.6600/1.6650.
JPY
Comment: Still struggling either side of a sort of ‘neckline’, consolidating below the 38% Fibonacci resistance and between the 9 and 26-day moving averages. Allow for a little more consolidation above yesterday’s low at 93.09 this morning and maybe all day. A drop below 93.00 adds considerable downside pressure, dragging Yen crosses lower, and a weekly close below 93.50 might add a little bearish pressure.
Strategy: Attempt shorts at 94.20/94.45; stop above 94.85. Add to shorts on a sustained break below 93.75 for 93.25, more next week.
