EUR
Comment: Inching slowly to the highest this year amid generalised US dollar weakness. Expect more of the same as the US authorities remain stubbornly silent on the matter.
Strategy: Buy at 1.4740, adding to 1.4700; stop below 1.4500. Add to longs on a break above 1.4750 for 1.5000 medium term and more long term.
GBP
Comment: Holding within the daily Ichimoku ‘cloud’ as sterling is the worst performing currency except the US dollar. Moving averages are positive but only a sustained break above 1.6750 will kick-start a squeeze to 1.6800, and eventually a rally through this year’s high at 1.7044.
Strategy: Buy at 1.6525; stop below 1.6400. First target 1.6740, then 1.7000 again.
JPY
Comment: Strong signs of instability yesterday as we rally from this year’s low at 90.12, ending with a ‘doji’ candle. Hopefully the 9-day moving average will once again limit the upside leading to a series of repeated downside tests of critical support between 87.00 and 85.00 over the coming weeks. The US dollar is no longer oversold against the Yen and while bearish momentum has eased, implied volatility has not managed a sustained break above 14.00%.
Strategy: Attempt small shorts at 91.10; stop well above 91.65. Short term target 90.20/90.00, then 89.00 and probably a sudden push to 87.10.
