EUR
Comment: Testing the top of a potential ‘rounded bottom’ but needs a daily (and then weekly) close above here to really get going. Moving averages have crossed to bullish and will hopefully limit the downside. Other currencies are leading by a long chalk and this is unlikely to change soon.
Strategy: Buy at 1.3685; stop below 1.3500. Add to longs on a sustained break above 1.3840 for 1.3900, then 1.4000.
EUR/JPY
Comment: Retreating again from the 125.00 area, the upper edge of the range since February and retracement resistance ahead of a growing Ichimoku ‘cloud’. While moving averages have turned bullish prices this morning have dipped below the 9-day one.
Strategy: Sell at 123.45, adding to 124.00; stop above 125.45. First target 123.00, then 122.00.
GBP
Comment: Testing the top of the potential ‘flag’ formation and the 26-day moving average, a pattern that increasingly looks as though it will not work out i.e. that the intermediate bear trend has already ended and the next move is up. We still feel Cable is trying to form an important medium term low point, but remains very vulnerable here, and against all other currencies, to a sudden very large ‘spike’. The daily close just above the 26-day average at 1.5300 is encouraging and should set up for a short squeeze to the thin point of the Ichimoku ‘cloud’ at 1.5600 early April. Record futures volume last week suggest there is an awful lot of unwinding to be done.
Strategy: Buy at 1.5300, adding to 1.5200; stop below 1.4950. Add to longs on a sustained break above 1.5425 for 1.5600.
JPY
Comment: Just under the bottom edge of the Ichimoku ‘cloud’ where the moving averages cluster. Expect a little more hesitation at current levels this morning and then a drop late today and tomorrow. Note that momentum is still bullish and that one-month at-the-money implied volatility is at its long term mean of 11.00%.
Strategy: Sell at 90.15, adding to 90.60; stop above 91.15. First downside target 90.00, then 89.30/89.00
