EUR
Comment: The Euro has retraced 61.8% of last year’s losses, neither the best nor the worst performing currency, and the best weekly close this year. Holding comfortably above a massive weekly Ichimoku ‘cloud’ but bullish momentum is not nearly as strong as it could be, plus the Euro is overbought so mixed signals on the best futures volume so far this year. Many are obviously rushing to re-think positions as on the ECB’s Effective Exchange Rate is at a record high.
Strategy: Attempt longs at 1.4535/1.4500; stop well below 1.4450. Add to longs on a break above 1.4636 for 1.5000 medium term.
EUR/JPY
Comment: Looking slightly more top-heavy, here and in a whole range of Yen crosses, though still within a very large weekly Ichimoku ‘cloud’. Dropping towards 131.00 (low so far today 131.30) with a drop below here adding to bearish momentum.
Strategy: Attempt shorts at 131.60, adding to 132.00; stop well above 133.00. Add to shorts below 131.00 for 129.00 short term and 126.00 further out.
GBP
Comment: Hovering at the top of the Ichimoku ‘cloud’ and slightly disappointing that Cable did not manage a weekly close above 1.6700. Expect for some hesitation today, and maybe for much of this week, below 1.6800, and eventually a rally through this year’s high at 1.7044.
Strategy: Buy at 1.6585; stop well below 1.6480. First target 1.6700, then 1.7000 again.
JPY
Comment: This year’s lowest weekly close since January as all Yen crosses drop. Bearish momentum has increased and, while the US dollar is a little oversold, the temptation for markets to push for a drop towards January’s low at 87.10 testing the new government’s mettle is very great.
Strategy: Attempt small shorts at 90.55; stop well above 92.00. Short term target 90.20/90.00, then 89.00 and probably a sudden push to 87.10.
