EUR
Comment: Time for a breather as news that it trades over 1.5000 hits the front page in some newspapers. Yesterday’s large ‘bearish engulfing’ candle suggest we shall correct and consolidate below this year’s high at 1.5064 this week and probably next. Dropping below the 9-day moving average and hopefully finding support at the 26-day one at 1.4770 and short term 50% Fibonacci support. The Euro is no longer overbought and bullish momentum has dropped significantly.
Strategy: Attempt longs at 1.4900, adding on a dip to 1.4850; stop below 1.4760. Short term target 1.4955, then 1.5055.
EUR/JPY
Comment: Rallying to just above the top of this year’s very large ‘triangle’ but small signs of instability yesterday mean that we continue to look for signs of building a new interim top. We shall continue to watch for stronger and more conclusive signs of toping.
Strategy: Attempt shorts at 137.25; stop above 138.55. Short term target 136.25 then 135.25.
GBP
Comment: A massive retreat from decent resistance at 1.6665, a level that held for most of the time since June. We shall now watch for signs of forming a new interim base, hopefully around 50% Fibonacci support and note the fact that the Ichimoku ‘cloud’ widens significantly in November. Cable is no longer overbought though momentum is zero. Almost record volume in the futures contract suggests many have been stopped out on the way down.
Strategy: Attempt small longs at 1.6350; stop well below 1.6200. First target 1.6550 then 1.6650.
JPY
Comment: Bullish momentum that is a lot stronger than expected has pushed JPY higher than we had allowed for putting it at its most overbought since early August. Nevertheless we see this as a countertrend rally in a long term trend to a weaker US dollar. We shall watch for signs of topping, creating yet another interim high, around the 38% Fibonacci retracement resistance and the increasingly large Ichimoku ‘cloud’.
Strategy: Attempt small shorts at 92.00; stop above 92.55. Short term target 91.60, then 90.00.
