EUR
Comment: This week’s fifth best performing currency (Swedish krona’s top dog) posting a new high for this year at 1.4622 (and hard to believe we started the week at 1.4290). Our first measured target remains at 1.5000 and we still feel implied volatility should increase this month as the Euro is overbought right now and bullish momentum not as strong as it was earlier this year.
Strategy: Buy at 1.4620, adding to 1.4500; stop well below 1.4450. Add to longs on a break above 1.4635 for 1.5000 medium term.
EUR/JPY
Comment: The Yen is gaining against some Asian currencies, dropping to the lower edge of a widening Ichimoku ‘cloud’ against the Euro. A break below the 9-day moving average, hopefully today, should send it sliding down towards 131.00.
Strategy: Attempt small shorts at 133.20, adding to 134.00; stop above 134.55. Add to shorts below 132.65 for 131.00.
GBP
Comment: Pushing above the top of the Ichimoku ‘cloud’ as the 9-day moving average helps Cable higher. Yesterday’s close above 1.6600 has also helped, as would a sustained break above 1.6745. Though still well below this year’s high at 1.7044 we feel that a strong weekly close today will force many into re-thinking currency strategy.
Strategy: Buy at 1.6715, adding to 1.6600; stop well below 1.6500. First target 1.6745, then 1.7000 again.
JPY
Comment: Bearish momentum increasing on the break below 91.50, where a weekly close below here should help prices along the way towards January’s low at 87.10. The authorities will probably become increasingly frantic as we move towards here and key ultra-long term support around 85.00. Inexperienced politicians will not make the job any easier.
Strategy: Sell at 91.15, adding to 92.25; stop above 93.35. Short term target 91.00/89.85, then a lot lower still with rather scary moves and potential intervention (which is unlikely to work over the long term).
