EUR
Comment: Struggling under this year’s high at 1.4339. 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 1.4180; 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: Most Yen crosses rallied by more than we had expected, this one through the 61% Fibonacci resistance and the top of the Ichimoku ‘cloud’, ending with a large ‘spike high’ yesterday. Watch for yet more signs of topping today.
Strategy: Attempt small shorts at 134.40; stop above 134.85. Add to shorts on a sustained break below 133.00 for 132.00.
GBP
Comment: Still hovering at the upper edge of the ‘triangle’ formation as the pound holds up a little better than some others (though lagging many minor currencies). Hopefully today a weekly close above 1.6600 should kick-start a decent rally.
Strategy: Attempt small longs at 1.6525; stop below 1.6155. First target 1.6550 then 1.6600/1.6650.
JPY
Comment: Rallying by more than we had allowed so that we have retraced half of the drop from early June to mid-July. This is seen as part of the process of thrashing around a sort of ‘neckline’ in what may turn out to be an A, B, C-type corrective bounce. Watch for signs of stalling and topping today and early next week.
Strategy: Attempt small shorts at 94.75; stop above 95.35. Add to shorts on a sustained break below 94.40 for 93.25.
