EUR
Comment: A fourth consecutive ‘spike low’ type formation against Fibonacci retracement support adds weight to our view that an important long term interim low is forming. Pity it didn’t manage a break above ‘channel’ resistance. Maybe this week. Note that the Euro is not overbought and that momentum is well off being bullish yet.
Strategy: Attempt longs at 1.3750, adding to 1.3670; stop below 1.3500. Add to longs on a sustained break above 1.3800 for 1.3840, then 1.3900.
EUR/JPY
Comment: Having moved up to 125.00 as expected. A sustained break out of the small range of the last five weeks (120.00 to 125.00) looks unlikely on a first attempt and therefore expect hesitation in a small range today.
Strategy: Possibly attempt small shorts at 124.65/125.00; stop above 125.55. First target 123.65.
GBP
Comment: A second consecutive weekly ‘hammer’ against 61% Fibonacci retracement support adds weight to our view that Cable is trying to form an important medium term low point. A weekly close above 50% retracement support at 1.5275 (also bottom of the massive weekly Ichimoku ‘cloud’ from mid-April) might turn momentum bullish.
Strategy: Attempt small longs at 1.5185; stop well below 1.5000. Add to longs on a sustained break above 1.5225 for 1.5300 and then more.
JPY
Comment: Having reached our upside target at 91.00 (high 91.09) watch for signs of topping here. This may be a messy slow process but Friday’s ‘doji’ at the very top edge of the Ichimoku ‘cloud’ underlines the instability at current levels. Continue to allow for a series of random moves roughly between 91.00 and 88.00.
Strategy: Sell at 90.65, adding to 91.00; stop well above 91.15. First downside target 90.20, then 89.30/89.00
