EUR
Comment: Friday’s drop has put the Euro back inside the range established early May, much to the delight of US dollar bulls. Bullish momentum has collapsed as has the overbought situation. This suggests we shall hold below last week’s high at 1.4448 this week and maybe all month while we try and establish a new interim base.
Strategy: Attempt longs at 1.4200; stop below 1.4100. Short term target 1.4300, then 1.4400.
EUR/JPY
Comment: Great excitement as several Yen crosses squeeze to new highs for the year. We are a lot more sceptical and feel that sustained rallies through a barrage of important resistance levels will be very difficult to achieve. Rather we shall be looking for ‘spike high’-type formations to build this month.
Strategy: Possibly attempt small shorts at 138.00; stop above 139.35. Short term targets 137.00 then 136.00.
GBP
Comment: Dollar bulls getting rather excited after two consecutive down days. We see this as a normal pullback of 38% to the top of the ‘triangle’ and the 9-day average at 1.6691 and shall be watching for signs of forming an interim base in this area. Watch for a reversal candle to form setting off for another short squeeze later in August where sterling is likely to lead other currencies.
Strategy: Attempt small longs at 1.6670; stop well below 1.6600. First target 1.7000/1.7044 again.
JPY
Comment: The biggest daily and weekly rally since early June taking us to the highest price since then. Lots of stops were triggered Friday and the US dollar is more overbought than it has been since early March. Plenty of resistance between 98.00 and 99.00 is expected to cap at least this week, maybe all month.
Strategy: Possibly attempt tiny shorts at 97.25; stop above 97.85. Short term target 96.80, then 96.25.
