EUR
Comment: Retreating into a good-sized daily Ichimoku ‘cloud’ after stalling ahead of the 26-day moving average. A mixed picture as moving averages suggest a short position but 50% Fibonacci retracement support propped up the Euro for the last two weeks. Momentum is no longer bullish and the Euro certainly not overbought. Expect more slow work around current levels.
Strategy: Attempt small longs at 1.2720; stop below 1.2575. First target 1.2800, then 1.2900.
EUR/JPY
Comment: Dropping below the bottom of the ‘triangle’ and set to re-test August’s low of 105.44. Many yen crosses are doing something similar, a fact which should reinforce the moves lower. The Euro is not oversold against the yen and momentum is bearish but not especially strong. Expect more cautious downside testing today and maybe all month.
Strategy: Possibly attempt small shorts at 106.15 but only if prepared to add to 108.00; stop above 109.65. First target 105.50, then 104.25.
GBP
Comment: Still clinging to 38% Fibonacci retracement support but support from the daily Ichimoku ‘cloud’ has not kicked in. We continue to feel that Cable is trying to put in a new interim low but needs bullish momentum to increase on a daily close above the 9-day moving average.
Strategy: Attempt small longs at 1.5385; stop well below 1.5290. First target 1.5490, then 1.5600.
JPY
Comment: Most people have missed this year’s relentless move and all too many are hoping for some sort of miracle from politicians and the authorities. Rabbits out of hats, perhaps? All elements of this chart suggest a short position, which has been the case since early June, and only now is the US dollar slightly oversold against the yen. Bearish momentum has increased marginally and futures open interest is roughly one third of 2007’s peak; too many still see this as a ‘carry trade’ candidate.
Strategy: Attempt shorts at 83.45, adding to 84.00; stop above 85.25. First target 83.00/82.80, then 81.95/81.50.
