EUR
Comment: Riots and tear gas in Athens and still the Euro holds at levels of the last four weeks. The 9-day moving average has levelled off while the 26-day one dropped again so the Euro is trading above both of these. A weekly close above 1.3640 would form another weekly ‘hammer’, a fourth consecutive ‘spike low’ type formation, adding weight to our view that an important long term interim low is forming.
Strategy: Attempt small longs at 1.3700, adding to 1.3600; stop below 1.3500. Add to longs on a sustained break above 1.3750 for 1.3800/1.3840.
EUR/JPY
Comment: Slow work but edging up towards 125.00 as expected. Note how the 26-day moving average dropped sharply towards the 9-day one and how the Lagging Span has crossed a big dark candle yesterday and might hold above the candles from Feb 8 to Feb 22. Unlikely today but only a weekly close above 125.00 might turn momentum bullish and allow this cross to break out of the small range of the last five weeks.
Strategy: Attempt small longs at 124.13, adding to 123.25; stop below 121.40. Add to longs on a sustained break above 124.35 for 125.00.
GBP
Comment: After Wednesday’s small ‘hammer’ yesterday’s small ‘bullish engulfing’ candle and close above the 9-day moving average is another positive. Also note that the candles of the last three days form a small reversal pattern, a sort of ‘wine glass’ pattern. We still feel it will re-test 1.5130/1.5200 today and form a second consecutive weekly reversal candle.
Strategy: Attempt small longs at 1.5040/1.5000; stop below 1.4850. Add to longs on a sustained break above 1.5136 for 1.5200 short term.
JPY
Comment: Nudging over the top of a thinning Ichimoku ‘cloud’ despite zero momentum; this is not especially significant and moving averages are suggesting a short position. Continue to allow for a series of random moves roughly between 91.00 and 88.00.
Strategy: Trade the range between 91.00 and 89.00 using generous stops.
