EUR
Comment: A small bounce from support at 50% Fibonacci retracement and 26-day moving average at 1.4500. If we can take out yesterday’s high at 1.4646 allow for a squeeze to the 9-day average at 1.4683. Hardly compelling stuff but that’s what we have to expect for a period of correction and consolidation.
Strategy: Attempt longs at 1.4630/1.4590; stop below 1.4500. Short term target 1.4700.
EUR/JPY
Comment: Yen crosses are looking for direction. This one is poised above trendline support and below the Ichimoku ‘cloud’ and the question is: how long will it take to break lower? Note that the Euro is still oversold against the Yen, and other Yen crosses are behaving differently. These must work in tandem to achieve the sudden drops we are predicting.
Strategy: Sell at 131.00, adding to 131.75; stop above 132.15. Short term target 130.00/129.84.
GBP
Comment: Messy and complex, as feared, as Cable struggles below the ‘neckline’ of a potential ‘head-and-shoulders’ top (which may well never work out and turn into a very large rectangle) and above the first longer term Fibonacci retracement support levels; these lie between 1.5700 and 1.4850. Note that the Lagging Span has bounced from the bottom of a good-sized Ichimoku ‘cloud’.
Strategy: Attempt small longs at 1.6045; stop below 1.5700. Short term target 1.6170/1.6200.
JPY
Comment: Trapped between a massive ‘hammer’ low and capped by the 9-day moving average. Rallies towards trendline resistance and the 26-day moving average at 91.40 are seen as medium term selling opportunities for an eventual test of January’s low at 87.10. The US dollar is no longer oversold and at-the-money implied volatility should increase as prices thrash around between 87.00 and 92.00 this month.
Strategy: Attempt shorts at 89.90; stop well above 90.50. Short term target 89.15 maybe 87.50.
