EUR
Comment: Boring as we continue to consolidate at the upper edge of a ‘triangle’ consolidation pattern. The Euro is no longer overbought though bullish momentum is poor. We feel that the long term trend to US dollar weakness will resume this month.
Strategy: Buy at 1.4365; stop well below 1.4200. Short term target 1.4400/1.4450.
EUR/JPY
Comment: All Yen crosses are trading below this year’s high, EUR/JPY hovering just above a very thin Ichimoku ‘cloud’. Some time this week we favour a drift below 132.00, a move which might accelerate causing another sudden slide to the 127.00 area.
Strategy: Attempt shorts at 133.70, adding to 135.00; stop well above 136.15. Short term target 132.00, looking to sell more on a sustained break below here.
GBP
Comment: Terribly dull as we hover in the middle of a large Ichimoku ‘cloud’, despite weakness in Sterling crosses. Little reason to see the picture improving dramatically as momentum is nil though Cable is certainly not overbought as it was early last month.
Strategy: Attempt small longs at 1.6325; stop well below 1.6095. First target 1.6400, then 1.6600.
JPY
Comment: Dropping below the daily and weekly Ichimoku ‘clouds’ and it is just a matter of time before we re-test July’s low at 91.73. Momentum is bearish (and probably increase if we now hold below 93.33) and the US dollar is still not oversold, a break below 91.50 should see implied at-the-money volatility increase significantly.
Strategy: Sell at 93.00; stop well above 93.55. Short term target 92.00, then 91.75 with moves below here likely to becoming increasingly erratic.
