EUR
Comment: Struggling though still holding 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, if not this month then in October.
Strategy: Attempt small longs at 1.4220; stop below 1.4085. Short term target 1.4350.
EUR/JPY
Comment: Dropping through a very thin Ichimoku ‘cloud’ and Yen crosses, all of them, are looking increasingly top-heavy. A drop below 131.00 should add to downside pressure, a move which might accelerate causing another sudden slide to the 127.00 area.
Strategy: Sell at 132.20, adding to 133.00; stop well above 134.15. Short term target 131.50, re-selling below 131.00 foe 127.00 (and probably a lot more further out).
GBP
Comment: Very disappointing as we hover in the middle of a large Ichimoku ‘cloud’. Little reason to see the picture improving dramatically as momentum is nil though Cable is certainly not overbought as it was early last month. Expect increasingly messy and erratic price action this month.
Strategy: Possibly attempt small longs at 1.6170; stop below 1.5985. First target 1.6370, then 1.6600.
JPY
Comment: Dropping below last week’s low, one small step towards a re-test of July’s low at 91.73. Yen crosses also look ‘heavy’ and should move lower too. 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 92.90; stop above 93.55. Short term target 92.50, then 91.75 with moves below here likely to becoming increasingly erratic.
