EUR
Comment: The Euro edged up to a new high for the year (1.4654) and bullish momentum has increased a little. However, because the Euro is overbought and futures open interest is increasing the risk of a shake-out remains.
Strategy: Attempt longs at 1.4630, adding to 1.4525; stop well below 1.4450. Add to longs on a break above 1.4665 for 1.5000 medium term.
EUR/JPY
Comment: Bouncing ahead of 131.00 (low 131.30 yesterday), and by more than expected, so that we are testing the lower edge of the daily Ichimoku ‘cloud’. We expect this to limit this latest bounce for another downside probe later this week.
Strategy: Possibly attempt shorts at 133.33; stop above 134.50. Add to shorts below 131.00 for 129.00 short term and 126.00 further out.
GBP
Comment: Hovering slightly unsteadily at the top of the daily Ichimoku ‘cloud’ and surprisingly sterling is not overbought but bullish momentum is very low. Expect a little more hesitation this morning though note that a sustained break above 1.6750 will probably kick-start a squeeze to 1.6800, and eventually a rally through this year’s high at 1.7044.
Strategy: Buy at 1.6650, adding to 1.6550; stop below 1.6480. First target 1.6740, then 1.7000 again.
JPY
Comment: Bouncing towards trendline resistance and the 9-day moving average that has limited the daily highs since mid-August. This has eased the oversold situation while open interest in the futures is suddenly soaring (more than double mid-August’s level).
Strategy: Attempt small shorts at 91.10; stop well above 92.00. Short term target 90.20/90.00, then 89.00 and probably a sudden push to 87.10.
