日本語
Español
中文
Русский
- New York 23:21
- London 04:21
- Barcelona 05:21
- Tokyo 13:21
- Sydney 15:21
Technical Analysis: Currencies
This report has been deactivated
9
0
GBP/NOK
Thu, Oct 29 2009, 13:18 GMT
by Nicole Elliott
Comment: October’s low at 8.8200, just above 1976’s record low around 8.2000, put Sterling close to its most oversold against Norwegian krone. Fairly sharp intra-day moves over the last two months suggest a major re-think and intermediate turn in the pound’s fortunes, here against one of this year’s best performers and against a raft of other currencies too. Yesterday’s close well above the ‘neckline’ of an inverted ‘head-and-shoulders’ has a first measured target at 9.8000 with a possible second squeeze to 10.1000 if enough momentum gathers. Note that moving averages have already turned positive and despite an impressive Ichimoku ‘cloud’ the Lagging Span has few candles to prevent it rallying strongly over the next month or so.
Strategy: Buy at 9.3750, adding to 9.2500; stop below 9.0000. Add to longs on a weekly close above 9.6000 for levels as above.
Published on Thu, Oct 29 2009, 13:18 GMT
9
0
EUR/GBP
Thu, Oct 29 2009, 13:17 GMT
by Nicole Elliott
Comment: Very big intra-day moves have formed a large ‘head-and-shoulders’ top in Euro/sterling, completed yesterday with a close below the ‘neckline’. This adds weight to our view that an interim high has probably formed and that we shall hold below here at least until the end of this year. However, while above 0.8400 which is two standard deviations from the equivalent long term mean at 0.7135, the danger is that EUR/GBP may re-test the all-time high (and weakest ever for sterling) at 0.9805. For the next couple of months we favour random, fairly sharp swings, between 0.9200 and 0.8600 (the measured target from the pattern, maybe 0.8400 (1.6 times size of ‘head’).
A weekly close above 0.9300 would probably set off another concerted upside push.
Published on Thu, Oct 29 2009, 13:17 GMT
9
0
GBP/JPY
Tue, Oct 27 2009, 15:26 GMT
by Nicole Elliott
Comment: Leading the pack and the one with the neatest price action of all the Yen crosses. Rallying strongly from decent support between 140.00 and 142.00, retracing half of the declines since August. This, combined with the daily Ichimoku ‘cloud’ (note how much bigger it gets over the coming month) should send this pair down again, hopefully quickly. Though moving averages have crossed to bullish, these should provide resistance to the Lagging Span so watch for an interim top to form around 152.00 this week. Also look for confirmation from other Yen crosses which ought to at least display signs of instability, or better still reversal formations, in the weekly candles.
A weekly close above 154.00 would force us to review.
Published on Tue, Oct 27 2009, 15:26 GMT
8
0
EUR/GBP
Thu, Oct 22 2009, 12:45 GMT
by Nicole Elliott
Comment: Last week’s ‘bearish engulfing’ candle with a ‘spike high’ at its top suggests that an immediate meltdown in the value of sterling has been postponed, and maybe averted for the rest of this year. However, as we remain just a whisker away from the all-time low on the Bank of England’s Trade Weighted basis there is absolutely no room for complacency. While above 0.8400, two standard deviations from the equivalent long term mean at 0.7135, the danger is that EUR/GBP will be drawn to parity (and even higher). For the next couple of months we favour random, fairly sharp swings, between 0.8600 and 0.9400.
A weekly close above 0.9435 would set off another concerted upside push.
Published on Thu, Oct 22 2009, 12:45 GMT
0
0
NOK/SEK
Tue, Oct 13 2009, 10:26 GMT
by Nicole Elliott
Comment: Deadly dull for much of 2008 and then we see the biggest ever gyrations between these two Scandinavian currencies since the Euro’s introduction. This year’s retreat from an all-time high at 1.3200 ended at the 61% Fibonacci retracement with a small ‘double bottom’. Bullish momentum has increased over the last three weeks to almost the highest on record, allowing prices to close above a good-sized weekly Ichimoku ‘cloud’. A monthly close above 1.2500 should send the Norwegian krone flying higher to decent resistance at 1.2600 and then the psychological 1.3000. Medium term there is a good chance that it will trade at new record highs towards year-end, a final (and possibly very dramatic) leg of the ultra-long term bull market that started in 1992.
A weekly close below 1.2000 postpones any rally, forcing us to review.
Published on Tue, Oct 13 2009, 10:26 GMT
0
0
AUD
Tue, Sep 22 2009, 10:35 GMT
by Nicole Elliott
Comment: Making its way up towards our medium term target which remains at 0.8800/0.8900, while trailing the Kiwi since May; a break above 0.9000 on a first attempt is unlikely. The ultra-long term perspective suggests that last year’s collapse below 0.8000, followed by a 25 cent rally this year, was all some sort of massive ‘extension’ cause by a manic rush through a tiny fire exit. Though overbought bullish momentum is running at some of the higher levels of the previous five years so we favour an eventual squeeze to 0.9400 and possibly a move to parity if generalised US dollar weakness really takes hold over the year-end.
A weekly close below 0.8400 would force us to adjust.
Published on Tue, Sep 22 2009, 10:35 GMT
0
0
NZD
Tue, Sep 22 2009, 10:33 GMT
by Nicole Elliott
Comment: Having comfortably met our extended measured target from ‘triangle’ consolidation (0.7200), what next? The scale and steepness of the rally since March is seen as vindicating our view that the collapse over the twelve months starting in March 2008 was ‘wrong’, caused by an incorrect interpretation of events and an overbought New Zealand dollar. Needless to say Kiwi is overbought today though bullish momentum very strong by historical standards. Once again it is challenging key ultra-long term resistance between 0.6900 (one standard deviation from the mean since 1982) and 0.7400. A quarterly close above 0.7200 would probably increase upward pressure for a re-test of the psychological 0.8000 and then the all-time high at 0.8213.
A weekly close below 0.7000 forces us to adjust.
Published on Tue, Sep 22 2009, 10:33 GMT
0
0
EUR/NOK
Mon, Aug 3 2009, 14:25 GMT
by Nicole Elliott
Comment: After the massive gyrations in December and January, the like of which we had never seen previously, this currency pair has settled into a wider trading band above the narrow range that held in 2008. So far the range was 8.6000 to 9.1500, above 8.4000 which is one standard deviation from the mean (8.0600) of the last twenty years. We feel the pair should drift lower, to 8.0400 where hesitation is likely. Then down again to 8.0000 and then broadly sideways between here and 8.4000 for months.
A weekly close above 9.2000 would force us to adjust and review.
Published on Mon, Aug 3 2009, 14:25 GMT
0
0
EUR/SEK
Mon, Aug 3 2009, 14:09 GMT
by Nicole Elliott
Comment: The massive gyrations that kicked off in October last year, and which sent at-the-money implied volatility to a new record high (triple its mean) and the krona to its weakest ever against the Euro (11.8000), appear to have come to an equally dramatic (and to us surprising) end. Last week’s break and close below a good-sized weekly Ichimoku ‘cloud’, below the ‘neckline’ of a huge, complex ‘head-and-shoulders’ top, under Fibonacci 50% retracement support, confirms the completion of an important pattern. A similar formation can be seen in the Swedish krona against the US dollar, marking this out as a krona phenomenon. This should set off a sharp drop to 9.6000 this summer and possibly all the way back to 9.2200 (the mean from 2001 to 2008 when it held in a tiny band between 8.8000 and 9.6000).
A weekly close above 10.7000 would force us to review.
Published on Mon, Aug 3 2009, 14:09 GMT
0
0
SGD
Wed, Jul 22 2009, 09:38 GMT
by Nicole Elliott
Comment: The corrective rally from last year’s record low at 1.3450 took prices a lot further, and continued for a lot longer, than we had imagined. It did eventually peak at 1.5600, just above the 1.5400 area we had specified, selling off hard between March and May. Since June prices have been consolidating above trendline support in a small inverted ‘flag’ formation. It now looks set to break below the weekly Ichimoku ‘cloud’, prodded by a raft of other currencies which are also gaining against the beleaguered greenback. At the moment we favour a sharp slide to 1.4100 followed by a slower decline to 1.4000 and then 1.3600.
A weekly close above 1.4650 forces us to review and adjust.
Published on Wed, Jul 22 2009, 09:38 GMT
10
0
CAD
Tue, Jul 21 2009, 13:38 GMT
by Nicole Elliott
Comment: Textbook stuff as we move down towards our measured target which remains at parity. The corrective bounce that started at 1.0785 in the first week of June saw record futures volume, six times the norm for 1980-2000, suggesting heavy speculative US activity. The move was capped by Fibonacci retracement in the middle of a wide Ichimoku ‘cloud’ at 1.1725 and now we are tumbling back down to trendline support. Though not quite at May’s extreme, bearish momentum is close to its strongest ever so a decisive break lower looks imminent. If all currencies start pulling in the same direction, forcing generalised US dollar weakness, then allow for an overshoot to C$0.9200. Note that since floating the strongest ever for the loonie against the greenback was 2008’s 0.9059.
Strategy: Sell at 1.1000, adding to 1.1350; stop above 1.1450. Add to shorts on a weekly close below 1.0885 and again on a sustained break below 1.0785 for levels as above.
Published on Tue, Jul 21 2009, 13:38 GMT
10
0
NZD
Tue, Jul 21 2009, 12:56 GMT
by Nicole Elliott
Comment: The rally from March’s multi-year low has taken us back to where last year’s excesses began in October, a 50% retracement of the entire move lower starting March 2008 – and a far more dramatic bear market than the 18-month one from March 1997. Price action since June is consolidation in a ‘triangle’ with the latest rally helped along by a widening Ichimoku ‘cloud’. The kiwi is not overbought and bullish momentum should increase on a weekly close above 0.6600, moving averages confirming the next leg up to 0.6900/0.7000. An ‘extension’ to 0.7200 is also highly likely prior to a period of correction and consolidation.
A weekly close below 0.6200 forces us to review and adjust.
Published on Tue, Jul 21 2009, 12:56 GMT
7
0
AUD
Tue, Jul 21 2009, 09:47 GMT
by Nicole Elliott
Comment: Price action since mid-April can be seen as a very large ‘flag’, understandable consolidation under what had been our first measured target at 0.8200. Note that one standard deviation from the mean since 1984 lies at 0.8155, making this a pivotal area. Retracement support and a large Ichimoku ‘cloud’ have nudged the Aussie higher, resulting in a daily close above the top of the pattern. Exciting for some, maybe, but what is really needed to confirm the next leg of what should be generalised US dollar weakness is a weekly close clearly above 0.8200. This should push momentum decisively into the bullish camp setting off a sharp squeeze to 0.8400 and then towards our medium term target which remains at 0.8800/0.8900. A break above 0.9000 on a first attempt is unlikely. The huge gyrations of the last twelve months suggest volatility should remain relatively high until at least year-end.
A weekly close below 0.7800 would force us to adjust and review.
Published on Tue, Jul 21 2009, 09:47 GMT
2
0
CAD/JPY
Tue, Jul 14 2009, 08:29 GMT
by Nicole Elliott
Comment: Having spent the last three months trading above 79.00, after trading below here for four consecutive months (the midpoint of the large trading band established since November) prices look set to break lower, if not this week then by the end of July. The Ichimoku cloud lines suggest the Yen strengthens against the Canadian dollar – taking the cross lower. While we cannot rule out another initial corrective bounce from our pivotal 79.00, rallies are unlikely to move above 84.00 and certainly no higher than the 90.00 mark. Downside targets are 76.50 short term and probably all the way back to the multiple lows between 70.95 and 70.55 that limited the downturn between November 2008 and March 2009. Note that the area from 70.95 to 68.45 has stopped declines for all but five months in 1995.
Strategy: Sell at 79.50, adding to 84.00; stop above 86.00. Add to shorts a weekly close below 79.00 and again on a daily close below 78.00. Targets as above.
Published on Tue, Jul 14 2009, 08:29 GMT
0
0
CHF/JPY
Tue, Jul 14 2009, 08:20 GMT
by Nicole Elliott
Comment: Like many other Yen crosses, Swiss-Yen peaked at 91.50 just above the Fibonacci 50% retracement at 90.00. Price action since early May can be seen as a very irregular head-and-shoulders top. Trend line support held on Wednesday and price action since then is a continuation triangle. Moving averages and Ichimoku clouds indicate we are in bear mode and it is just a matter of time before we break pivotal support at 83.00 which happens to be the mid-point of the very large trading band of the last eight months.
Strategy: Attempt small shorts at 85.00 but be prepared to add to 88.00; stop on a weekly close above 90.00. Add to shorts on a weekly close below 84.00 and again on a sustained break below 82.50 for a minimum short term target at 81.25, probably 79.00 further out.
Published on Tue, Jul 14 2009, 08:20 GMT
0
0
AUD/JPY
Thu, Jul 9 2009, 14:03 GMT
by Nicole Elliott
Comment: The rally from a ‘double bottom’ against the record low 55.00 area lasted longer and went higher than we had originally predicted. Nevertheless it has now formed an interim top against Fibonacci resistance and the top of a very large, flat-topped Ichimoku ‘cloud’, the break below immediate trendline support confirming this week. It has found support at the lower edge of the ‘cloud’ and Fibonacci support at 71.00 and is likely to try and hold above here for another week or two. The down to 68.00, the middle of this year’s broad trading band and possibly 65.00 where it ought to form a new interim base. We remind that we expect broadly sideways moves in all Yen crosses throughout the whole of 2009.
A weekly close above 78.00 forces us to review.
Published on Thu, Jul 9 2009, 14:03 GMT
0
0
EUR/CHF
Wed, Jul 8 2009, 14:14 GMT
by Nicole Elliott
Comment: The Swiss National Bank has made a determined effort to weaken the Swiss franc, spending a fortune to keep it above the Ichimoku ‘cloud’, first in March and then again in June. The reality, however, is that while lifting the pair up off last year’s record low, we are merely establishing a slightly higher trading band with a mean around the psychological 1.5000. Not the first time this safe-haven currency fights its own central bank. Allow for more of the same with prices holding between 1.4700 and 1.5400 most but not all of the time.
Only a monthly close outside our expected trading range would force us to review.
Published on Wed, Jul 8 2009, 14:14 GMT
0
0
GBP/JPY
Wed, Jul 8 2009, 14:01 GMT
by Nicole Elliott
Comment: Rallying neatly in a ‘channel’ since February and now tumbling below the ‘neckline’ of a small ‘head-and-shoulders’ top. This marks an interim top and prices are likely to hold below here for several months, maybe until year-end. Allow for some hesitation this week and next at trendline support and the lower edge of the Ichimoku ‘cloud’, just ahead of the psychological level at 150.00. Then down to the first measured target at 148.00, where yet more consolidation is likely as many feel that 148.00/150.00 is a fair price for this pair. Then down again to 140.00/142.00, retracing half of this year’s rally. Then more broadly sideways work – probably though not necessarily.
A weekly close above 159.00 would force us to review.
Published on Wed, Jul 8 2009, 14:01 GMT
10
0
GBP/AUD
Thu, Jun 18 2009, 14:06 GMT
by Nicole Elliott
Comment: We are almost at the end of Q2 2009 and this currency pair is still trying to stabilise just above the psychological 2.0000 area and ahead of 1.9650 (which is 1.6 Standard Deviations from the mean of the last twenty years). This very slow work is perhaps understandable as it follows 2008’s massive gyrations. A weekly close above recent highs and retracement resistance at 2.1000 should turn momentum decisively bullish, setting off a short squeeze to 2.2000 which is unlikely to yield on a first attempt.
Strategy: Attempt small longs at 2.0450, adding to 2.0225; stop well below 2.0000. Add to longs on a sustained break above 2.1000 for 2.2000 and probably 2.2500.
Published on Thu, Jun 18 2009, 14:06 GMT
14
0
Six month Outlook for EUR/GBP
Thu, Jun 18 2009, 10:14 GMT
by Nicole Elliott
Comment: Over the last six months the Euro lost ground against the pound, comfortably meeting our June target at 0.8500 plus an overshoot to 0.8400. Over the next three months allow for some sideways consolidation, probably between 0.8300 and 0.8900, where cautious price swings should see at-the-money implied volatility drift down and hold around 10.00%. In the final quarter of 2009 we expect a drop to 0.8200, maybe a brief test of the 0.8000 area, and we cannot rule out another overshoot to key support between 0.7850 and 0.7700.
A weekly close clearly above 0.9000 forces us to review.
Published on Thu, Jun 18 2009, 10:14 GMT
7
0
CHF
Thu, Jun 11 2009, 14:14 GMT
by Nicole Elliott
Comment: Price action since August is seen as a massive, irregular, ‘triangular’-shaped A, B, C-type correction where C is 0.61% the size of A. Despite the highest volatility in at least fifteen years, one-month at-the-money implied hitting a whopping 24.55%, weekly Ichimoku ‘clouds’ have done a good job limiting the downside until three weeks ago. Now we are consolidating neatly under a flat ‘cloud’, testing trendline support, thereby maintaining downside pressure. The US dollar is no longer oversold so it is just a matter of time before we drop to new recent lows and then to re-test 2008’s record low under the psychological parity.
Strategy: Sell at 1.0800; either use a tight stop above 1.1000 or be prepared to add to 1.1200 using a stop above 1.1400. Add to shorts on a weekly close below 1.0600 for 1.0400 short term and 0.9950 further out.
Published on Thu, Jun 11 2009, 14:14 GMT
6
0
EUR/KRW
Wed, May 27 2009, 13:52 GMT
by Nicole Elliott
Comment: The trend for Euro appreciation against the South Korean Won was established in 2001 and reasserted itself early in 2006; recent events have not altered the technical picture at all. Rather, increased currency volatility from September last year can be seen as ‘triangle/rectangle’ consolidation above trendline support. Price declines since mid-March have been caught at the base of the Ichimoku ‘cloud’ and we look set to break above the top of it. Therefore we now favour a rally back up to key resistance around 1950, with a break above the psychological 2000 targeting 2182, the equivalent to what would have been the high in 1997 Asia crisis.
A sustained break below 1650 would force us to review.
Published on Wed, May 27 2009, 13:52 GMT
7
0
GBP/NOK
Wed, May 27 2009, 13:18 GMT
by Nicole Elliott
Comment: Over the last three months the pound has gained as much as 10.00% against some currencies (USD) and lost the same amount against others (NZD); Scandinavian currencies lie in the middle of these extremes. From the lowest price in thirty years at 9.1100, admittedly above 1976’s record low around 8.2000, Sterling is back above very long term support around 9.8000 Norwegian krone. This adds weight to our view that the drop below 9.6000 was an ‘extension’ which culminated in a ‘spike low’. The pattern so far this year looks like an inverted ‘head-and-shoulders’ where there is a good chance of closing above the neckline and the 200-day moving average this week. Once completed, the formation has a measured target of at least 10.6500, more likely 11.0000 and probably 11.4000, the mean price of the last twenty-five years.
Strategy: Buy at 10.1900, adding to 10.0000; stop below 9.5500. Add to longs on a weekly close above 10.3300 for levels as above.
Published on Wed, May 27 2009, 13:18 GMT
1
0
CAD
Thu, May 14 2009, 14:27 GMT
by Nicole Elliott
Comment: Alarming price swings since October, almost double the size of anything seen in the last twenty-five years, so that one-month at-the-money implied volatility set a record high at 25.75%. This then retreated considerably, basing ahead of 10.75% which is one standard deviation above the mean since 1995, and looks set to climb again this month. In other words, volatility this year is likely to hold well above the average we have come to expect. The massive ‘quadruple top’ or ‘rectangle’ saw its lowest weekly close Friday, right at the very lowest point of the big sideways range. This suggests that, like the Australian dollar, the ‘loonie’ is leading the way to generalised US dollar weakness. Because the greenback is oversold here allow for another week or two of hesitation above the bottom of the Ichimoku ‘cloud’ at 1.1350. The down again, maybe quite quickly, to the measured target at parity. If enough momentum builds, as it might well do if all currencies start pulling in the same direction, then allow for an overshoot to 0.9200.
Strategy: Sell at 1.1730, adding to 1.2000; stop above 1.2500. Add to shorts on a weekly close below 1.1300 and again below 1.0700 for levels as above.
Published on Thu, May 14 2009, 14:27 GMT
12
0
AUD
Wed, May 13 2009, 11:17 GMT
by Nicole Elliott
Comment: After dithering for four consecutive weeks at the pivotal 0.7200 area, at last! A weekly close clearly above it confirming a break higher, marking the next step in the rally we expect this year caused by generalised US dollar selling. The Australian dollar is overbought but bullish momentum is stronger than it has been in almost three decades (a neat counterbalance to the bearish pressure on the way down last year). One-month at-the-money implied volatility appears to be basing against the 17.00% area (one standard deviation above the mean of the last 15 years) and will probably pick up to 25.00% this summer. Our first measured target is 0.8200 and probably 0.8800 further out.
A weekly close below 0.7200 would force us to adjust and review.
Published on Wed, May 13 2009, 11:17 GMT
1
0
EUR/HUF
Tue, Mar 3 2009, 14:50 GMT
by Nicole Elliott
Comment: Having spent the last nine years trading fairly neatly around a mean at 253.00 the Hungarian forint has weakened from a record 227.29 per Euro to February’s weakest ever at 309.85 – a whopping 36.00%. There is probably worse to come as chart patterns currently show no signs of pressure abating let alone reversal signals. A sustained break above 310.00 suggests a move to our next measured target at 335.00.
A weekly close below 295.00 eases immediate upside pressure but only below 285.00 would we be forced to review.
Published on Tue, Mar 3 2009, 14:50 GMT
2
0
Mexican Peso
Tue, Mar 3 2009, 11:44 GMT
by Nicole Elliott
Comment: In a world of catastrophic losses, failing giants and clueless politicians everyone and anything can be the next target. Competitive currency devaluations might be the latest cure-all idea, Asia, Eastern Europe and some Latin American ones losing between 5% and 22% versus the US dollar so far this year. Mexico’s currency took a tumble starting October last year, pressure building in this massive ‘right-angled triangle’ pattern since then. Having broken higher to its weakest ever, the measured target is 16.5000/17.0000 because bullish momentum as strong as it was in March 1995, and very long term we would not rule out a high at 18.2500. EUR/MXN should be the next to move on up to our measured target at 21.5000/21.7500.
A weekly close below 14.5000 would force us to review.
Published on Tue, Mar 3 2009, 11:44 GMT
1
0
SGD
Thu, Feb 19 2009, 16:17 GMT
by Nicole Elliott
Comment: The rally from last year’s record low at 1.3450 has taken prices a lot further, and continued for a lot longer, than we had imagined. Nevertheless there is no doubt it is a corrective move, stalling against 38% Fibonacci retracement in November last year and again this week. There is a chance that we shall form a ‘double top’ here signalling the start of a long move lower. This would tally with our view in other currencies where we favour renewed generalised US dollar weakness this year. At the moment we favour a sharp slide to 1.4400 followed by a slower decline to 1.4000, maybe all the way back to 1.3450.
A weekly close above 1.5350 forces us to review.
Published on Thu, Feb 19 2009, 16:17 GMT
7
0
EUR/CAD
Wed, Feb 18 2009, 14:22 GMT
by Nicole Elliott
Comment: Retreated quickly from a near-record high at 1.7500, back inside the 1.4800 to 1.6400 sort of range that held for most of last year. We feel this currency pair is most likely to consolidate randomly, in a series of complex messy moves, inside here again this year. So far it has managed to hold above 1.5600 but a series of descending highs and a fairly thick Ichimoku ‘cloud’ suggests an imminent drop to 1.5400 and then more slowly to the 1.5000 area.
Strategy: Sell Euros and buy Canadian dollars at 1.5800; stop above 1.6400. Add to longs on a weekly close below 1.5600 for 1.5400 short term and 1.5000/1.4800 medium term.
Published on Wed, Feb 18 2009, 14:22 GMT
0
0
EUR/CHF
Wed, Feb 18 2009, 11:34 GMT
by Nicole Elliott
Comment: The rollercoaster ride continues, keeping one-month at-the-money implied volatility over double the mean of the last decade, as we hover nervously above October’s all-time low at 1.4300 (and record ever against the Deutschemark equivalent). As ‘flight to quality’ intensifies this month we feel that a re-test of this point is imminent, a sustained break below 1.4700 prompting another good clear-out. Below that would be too scary for words, measured targets suggesting 1.3500/1.3600.
Strategy: Sell at 1.4775 but only if prepared to add to 1.5100; stop above 1.5225. Add to shorts on a weekly close below 1.4700 and again below 1.4650 for 1.4400/1.4300 to cover and to wait and watch a little.
Published on Wed, Feb 18 2009, 11:34 GMT
0
0
CAD/JPY
Tue, Feb 10 2009, 15:27 GMT
by Nicole Elliott
Comment: Last year’s collapse from 2007’s ‘head-and-shoulders’ top saw the Yen strengthen back to where it had been in 1999, just shy of its strongest ever which was 1995’s 57.75. Since late October it has been trying to draw a line in the sand, working in a right-angled ‘triangle’ formation with January’s drop to a low at 68.40 seen as an ‘extension’. Unfortunately we cannot rule out another one of these until wemanage a weekly close above 77.25. Until then tread with care, buying dips, for what should eventually set up for a short-squeeze to 85.00/87.50, maybe 90.00 medium to long term.
Strategy: Buy at 74.50, adding to 72.00; stop on a daily close below 71.00. Add to longs on a weekly close above 77.25 and 79.00 for levels as above.
Published on Tue, Feb 10 2009, 15:27 GMT
8
0
NOK/JPY
Tue, Feb 10 2009, 14:51 GMT
by Nicole Elliott
Comment: Since collapsing from a fifteen-year high at 22.000, this currency pair has been forming a downward-sloping ‘wedge’ formation which was broken this month. We feel that this year’s low at 12.170, ahead of 2000’s all-time low at 11.130, will hold for many months and probably for the whole of 2009. At the moment we favour a squeeze to the 15.000 area followed by sideways consolidation in an as yet to be established broad band.
Strategy: Buy at 13.675/13.000; stop below 12.000. Add to longs on a weekly close above 13.850 for 15.000.
Published on Tue, Feb 10 2009, 14:51 GMT
6
0
NOK/SEK
Tue, Feb 10 2009, 11:35 GMT
by Nicole Elliott
Comment: Deadly dull in 2007 and then we see the biggest ever gyrations between these two Scandinavian currencies since the Euro’s introduction. Last month’s close above 1.1975, one standard deviation for the mean since 1999, suggests the Norwegian krone will strengthen against its Swedish counterpart and move quickly higher to our long-held target at 1.2500/1.2600. Above here and things would be scary indeed.
Strategy: Buy at 1.2125, adding to 1.2000; stop well below 1.1800. Target 1.2500/1.2600.
Published on Tue, Feb 10 2009, 11:35 GMT
8
0
CHF/JPY
Tue, Feb 10 2009, 10:03 GMT
by Nicole Elliott
Comment: Having called the exact top to this currency pair (with a downside target at 76.00), it is perhaps presumptuous and arrogant of us to now call for a bottom – but that is what we are doing in most Yen crosses. We have a potential massive ‘double bottom’ around the 76.00 area which should set up for a squeeze up to 86.00 at the very least. After that we may see prices establishing a very broad sideways trading band. However, we will also not rule out a squeeze to 91.00 some time this year.
Strategy: Buy at 78.00, adding to 77.00; stop below 75.00. Add to longs on a weekly close above 80.00 to cover between 84.00 and 86.00 and then wait for potential signs of topping.
Published on Tue, Feb 10 2009, 10:03 GMT
0
0
GBP/CHF
Thu, Feb 5 2009, 17:11 GMT
by Nicole Elliott
Comment: The new record low at 1.5100 last month should mark a new important point for this currency pair and the start of a multi-year, many-waved rally. Sterling became as oversold as it did in 1992 and momentum has some way to go before it turns decidedly bullish. Today we have edged above January’s high and look set to test the top of the Ichimoku ‘cloud’. A weekly close above 1.7000 should add a little more upside pressure for a squeeze to 1.8500/1.8700 where some consolidation is likely. Later on back up to the psychological level at 2.0000.
A weekly close below 1.6000 would force us to review.
Published on Thu, Feb 5 2009, 17:11 GMT
11
0
GBP/AUD
Thu, Jan 29 2009, 14:24 GMT
by Nicole Elliott
Comment: Sterling and the Australian dollar have been battling it out to see which will be bottom of the pile, causing unprecedented massive gyrations, bigger even than those in 1992. We feel that this month prices have been trying to stabilise just above the psychological 2.0000 area and ahead of 1.9650 (which is 1.6 Standard Deviations from the mean of the last twenty years). Our short term target is 2.2000 and medium term 2.3000.
Strategy: Attempt small longs at 2.1300, adding to 2.1000; stop well below 2.0000. Add to longs on a sustained break above 2.2300 for 2.3000.
Published on Thu, Jan 29 2009, 14:24 GMT
9
0
CAD
Tue, Jan 27 2009, 11:49 GMT
by Nicole Elliott
Comment: Last year the Canadian dollar backed up an awful lot more than we had expected, neither the best performing major currency (that title goes to the Yen), nor the worst (arguably the South Korean won). Over the last three months it has displayed what can only be described as unusual and alarming price swings, almost double the size of anything seen in the last twenty-five years, so that one-month at-the-money implied volatility set a record high at 25.75%. Despite political turmoil ten-year Canadian Treasury bonds hit their lowest yield ever at 2.51% and the Bank of Canada’s target rate at just 1.00% likewise. Looking at the chart above the pattern could be either a massive right-angled ‘triangle’ or a ‘quadruple top’. We currently favour the latter but realise that an initial and dramatic squeeze higher, a ‘false break’, could then be followed by a steady move lower. This should keep volatility high for another month, then trending down along with the US dollar so we return to parity.
Strategy: Attempt shorts at 1.2215, adding to 1.2600; stop well above 1.3020. Add to shorts on a weekly close below 1.1800 and again below 1.1400 for 1.0600 and then 1.0000.
Published on Tue, Jan 27 2009, 11:49 GMT
10
0
EUR/CZK
Thu, Jan 22 2009, 15:39 GMT
by Nicole Elliott
Comment: Having called a bottom to the Czech koruna’s gains against the Euro too often over the last nine years, we had to get it right eventually! The whole of the decline is a massive A, B, C-type move where C=A. Trendline resistance has stalled the strong bounce that started late July, and though terribly overbought bullish momentum is still close to record high. We favour some consolidation under 28.000 over the coming month, maybe three, prior to another rally to the psychological area at 30.000, maybe 31.000.
A monthly close below 25.000 would force us to review.
Published on Thu, Jan 22 2009, 15:39 GMT
1
0
EUR/SEK
Wed, Jan 21 2009, 17:49 GMT
by Nicole Elliott
Comment: After trading pretty much between 9.0000 and 9.5000 for the last eight years, oh my goodness! The Swedish krona soared to 11.4250, its weakest ever against the Euro, down 41% from its strongest 8.0400 of May 2000. Needless to say one-month at-the-money implied volatility also set a new record at 20.00%. Though we are still above trendline and Ichimoku ‘cloud’ support, we feel the rally is over and that a slow move lower is imminent, dragging implied volatility with it. Over the next month we favour a move down to 10.3000, with a target at 9.7500 roughly four to six months after that, and vol roughly 10.00%.
Published on Wed, Jan 21 2009, 17:49 GMT
9
0
EUR/NOK
Tue, Jan 20 2009, 15:08 GMT
by Nicole Elliott
Comment: Just when we wrote off the Norwegian krone as too boring for words, it suffers its most dramatic losses ever, hitting a record high at 10.1700, and one-month at-the-money implied volatility rockets to 22.65%. Having retraced half of this move since Christmas, it looks as though it will consolidate above 9.0000 for another month or so. Rallies are likely to be capped between 9.6000 and 9.8000 and are seen as a selling opportunity for an eventual drop to 8.4000, one standard deviation from the mean of the last twenty years at 8.0600.
A weekly close above 9.6500 would force us to adjust and review.
Published on Tue, Jan 20 2009, 15:08 GMT
10
0
AUD
Mon, Jan 19 2009, 14:44 GMT
by Nicole Elliott
Comment: From a 2008 peak at $0.9850 to a low at $0.6000, retracing 75% of the rally started in 2001, in just 14 weeks is no mean feat; this is what desperate ‘de-leveraging’ looks like. Since then it has been attempting to base in a ‘rounded bottom’ formation though the rally since November has been slow and poor and has been halted by a large Ichimoku ‘cloud’. Let’s hope that same ‘cloud’ will now limit the downside and by the time it gets thin prices can start to rally through the recent high. Note that one-month at-the-money implied volatility is still extremely high by historical standards and is expected to hold above 22.00% (and below October’s record 53.00%) for several months.
A weekly close below 0.6300 would force us to adjust and maybe review.
Published on Mon, Jan 19 2009, 14:44 GMT
8
0
CHF
Tue, Dec 16 2008, 10:47 GMT
by Nicole Elliott
Comment: The unwinding of the ‘carry trade’ and repatriation created a massive demand for US dollars, something we completely underestimated, forgetting that so many currencies are pegged to the greenback one way or another. While we feel further de-leveraging is likely in January, smaller amounts and less desperate sellers mean the push into dollars will probably not materialise. Rather, we feel we shall reverse (at least in part) many of the FX moves of the last six months. The Swiss franc appears to have topped against 1.2200 and is testing trendline support, while on the Bank of England’s Trade Weighted Index it is back within one standard deviation from the mean after hitting its weakest ever in October. A daily close below 1.1500 and the 50-day moving average should add to bearish pressure and in thin markets a sudden slide to 1.1200/1.1100 is possible, EUR/CHF also moving lower. Next year we expect further generalised US dollar weakness.
Strategy: Sell at 1.1565; stop above 1.1830. Add to shorts on a weekly close below 1.1500 for 1.1200 short term and 1.1000/1.0800 further out.
Published on Tue, Dec 16 2008, 10:47 GMT
9
0
EUR/PLN
Mon, Dec 15 2008, 14:59 GMT
by Nicole Elliott
Comment: Another victim of de-leveraging, the Polish zloty has weakened against the Euro (and the dollar, sterling and Yen) as non-core assets are sold to re-capitalise banking and business. From its strongest ever at 2.1942 in July it has rallied smartly easily reaching our target at 3.9000. Today at 4.0000 it is just above the mean since the Euro was introduced making tactics tricky. We feel that in Q1 2009 there will be another, more cautious, round of unwinding of the ‘carry trade’. Therefore we feel there is a final little leg of Euro strength against Eastern European currencies, where the zloty should hit 4.1000, maybe 4.2000, before settling down into a new trading band. At the moment we favour a lot of work between 3.8000 and 4.2000 for the whole of 2009. A sustained break above 4.3400 (one standard deviation from the mean) is considered unlikely, although a possibility because bullish momentum is currently stronger than it has ever been.
A weekly close below 3.7000 would force us to review.
Published on Mon, Dec 15 2008, 14:59 GMT
0
0
AUD/CAD
Wed, Oct 22 2008, 13:34 GMT
by Nicole Elliott
Comment: So much for lumping ‘commodity currencies’ together! The Australian dollar has been pummelled almost to death, losing 33.00% against the Yen in the last month alone, and suffered its biggest ever quarterly fall against its Canadian counterpart. The collapse ended suddenly with a massive reversal from a record low at 0.7155. We view this as the ultimate example of unwinding of the ‘carry trade’ and shall now be watching to see if the pair manages a monthly close above important support at 0.8200, or even better above 0.8550 which is one standard deviation from the mean since 1985. After that we would allow for a series of random swings roughly between 0.8500 and 0.9500.
Strategy: Buy at 0.8400, adding to 0.8200; stop well below 0.7700. Add to longs on a weekly close above 0.8500 for 0.8800 medium term and 0.9500 long term.
Published on Wed, Oct 22 2008, 13:34 GMT
0
0
EUR/CHF
Mon, Oct 6 2008, 15:19 GMT
by Nicole Elliott
Comment: Starting in January 2007, this chart looks very like those of many major equity indices, and some Yen crosses, because they are both examples of the many guises of the ‘carry trade’. This is unravelling fast as banks and other financial institutions are forced to raise cash in a hurry. The Swiss franc is now nearly as strong as it was in March (1.5340) when the first clear-out took place. It is now set to move lower still with last week’s close below 1.5600 (the lowest this year) pushing bearish momentum stronger still. One-month at-the-money implied volatility is close to March’s high at 8.80%. We still favour a drop to 1.5000/1.4900 where a bout of consolidation is possible although a collapse to 1.4500 medium term cannot be ruled out.
Strategy: Sell at 1.5424, adding to 1.5550; stop above 1.5900. Add to shorts on a weekly close below 1.5325 for 1.5000 medium term and maybe 1.4500.
Published on Mon, Oct 6 2008, 15:19 GMT
0
0
NZD/JPY
Thu, Sep 11 2008, 11:04 GMT
by Nicole Elliott
Comment: Along with GBP/JPY, NZD/JPY has been leading Yen crosses lower and looks set to complete a multi-year massive topping pattern. It is a ‘broadening top’, or ‘megaphone’, with three successively higher upside lunges. This is similar to patterns in some equity indices and underlines the effect of the ‘carry trade’ (and its inverse, asset price destruction) in so many financial markets. As Yen crosses unravel, which they can do more quickly than many imagine, bearish momentum becomes unstoppable with the moves encouraging similar moves in other currencies. Therefore our medium term target for this pair is 59.00 and maybe 54.00.
Strategy: Sell at 69.35, adding to 72.50; stop well above 74.55. Add to shorts on a monthly close below 70.00 and on a weekly one below 67.75. Add again on a sustained break below 67.00 for levels as above.
Published on Thu, Sep 11 2008, 11:04 GMT
0
0
GBP
Wed, Sep 10 2008, 15:22 GMT
by Nicole Elliott
Comment: A highly unusual chart pattern above the recent low at 1.7471: a possible ‘spinning top’. Once again expect it to try and base today. Be very careful.
Strategy: Attempt small longs at 1.7620; stop below 1.7400. Short term target 1.8000, then 1.8300.
Published on Wed, Sep 10 2008, 15:22 GMT
0
0
EUR/CHF
Tue, Sep 2 2008, 09:13 GMT
by Nicole Elliott
Comment: Little to add since we last wrote this one up in mid-May. The cross continues to trade just below the pivotal area around 1.6300 and has formed a potential large ‘double top’ since then. Prices have struggled below the Ichimoku ‘cloud’ for months and are being dragged down by it this month. Note how it thickens by mid-September, probably adding to downside pressure and momentum should turn bearish on a daily close below 1.6100. The question then will be whether the next drop will be as dramatic as last March’s one. Possibly because one-month at-the-money implied volatility should hold above 4.50% and looks set to push up to 6.50%. Realistically prepare for a very sudden collapse to 1.5800 followed by a steady long term decline to 1.5000.
Strategy: Sell at 1.6100, adding to 1.6250; stop above 1.6375. Add to shorts on a daily close below 1.6100 and again on a weekly close below 1.6000 for 1.5800 short term and then a lot more.
Published on Tue, Sep 2 2008, 09:13 GMT
0
0
AUD
Thu, Aug 14 2008, 09:33 GMT
by Nicole Elliott
Comment: Many are pointing to the Aussie’s dramatic collapse over the last four weeks, calling a cyclical low in US dollar weakness and a top to the commodities boom generally. We disagree and feel the precipitous fall was caused by thin markets and the record high they started from. We also feel that while record grain and oilseed prices have now found a long term peak, this is not the case for metals and energy products. The stunning similarities in the currency’s move now and in August last year cannot be overlooked, as well as how well the Ichimoku ‘cloud’ has contained the downside on previous occasions. Therefore we are looking for an interim low to form by the end of this month, maybe it is in place already, and look to buy the Australian dollar against its US counterpart using this week’s low (0.8590) as a stop. Assuming a low is imminent, we favour a quick rally to 0.9300 and our long term target remains at parity.
A monthly close below 0.8750 would force us to re-think, suggesting an important high is already in place. There is a small chance that while pushing higher this year, the move then fizzles out very rapidly.
Published on Thu, Aug 14 2008, 09:33 GMT
1
0
CHF/JPY
Wed, Jul 30 2008, 13:27 GMT
by Nicole Elliott
Comment: In 2003 and 2004 we were interminably calling for a resumption of the long term uptrend, only to find ourselves in exactly the same spot until Q1 2006. This year feels the same as we repeatedly call for a top to this market only to find it edging fractionally higher, but not by enough to change our mind. We see the move of the last two months as some sort of ‘extension’ and are watching for a sharp reversal, hopefully imminently. A weekly close below 102.00 would add weight to our view but very long term only a break below 94.50 completes a multi-year huge top. Medium and long term targets are 90.00 and 76.00.
Strategy: Attempt small shorts at 103.00; stop above 105.50. Add to shorts on a weekly close below 102.00 and again on a monthly close below 100.00 for 95.00 short term, then levels as above.
Published on Wed, Jul 30 2008, 13:27 GMT
0
0
GBP/CHF
Wed, Jul 30 2008, 09:52 GMT
by Nicole Elliott
Comment: Quite extraordinary! The biggest collapse in the value of sterling versus the Swiss franc since 1992 and then we come to an abrupt halt. Price action since March, here as in so many other financial instruments, is seen as a corrective bounce. Therefore while below pivotal 2.1200, one standard deviation from the mean of the last twenty years, we shall continue to expect a test of 1.8000 later this year (possibly breaking below the all-time low of 1.7515 set in November 1995). From here a multi-year rally should start. However, our confidence in this view has been severely dented by price action this month and we may well have to re-think. Plan B would involve many months of sideways trading in a broad band, probably roughly between 1.9000 and 2.1500.
A monthly close above 2.1200 would force us to change tack.
Published on Wed, Jul 30 2008, 09:52 GMT
0
0
EUR/NOK
Tue, Jul 29 2008, 13:58 GMT
by Nicole Elliott
Comment: Always said to be attractive because of its petro/high yielder status, yet we have nothing to add since last writing this one up. In brief, we repeat yet again: for those who have to, trade the band between 7.7000 and 8.2000. A sustained break below 7.6000 still looks elusive and one-month at-the-money implied volatility should hold between 4.75% and 5.25% most but not all of the time. Note that since the Euro’s introduction the Norwegian krone has traded around a mean of 8.0400, one standard deviation around this point amounting to 28 Øre or 3.50% of the mean. Not a lot in it really.
Published on Tue, Jul 29 2008, 13:58 GMT
0
0
NOK/SEK
Mon, Jul 28 2008, 14:17 GMT
by Nicole Elliott
Comment: Little movement in months as prices consolidate between 1.1500 and 1.2000, as expected. Normally we would label this a ‘symmetrical triangle’ and favour another rally later this year with the potential for a short if brief squeeze higher which should culminate in a ‘spike high’ ahead of 1.2500 around year-end. This textbook outlook must be tempered in the light of the dwindling dynamics of Scandinavian currencies generally. Whether they are being traded as quasi-Euros, or whether the fundamentals have moved closer together one cannot say, but the reality is all we seem to get are small moves in smaller ranges year after year after year.
Strategy: Trade the range (1.1500 to 1.2000); re-buy on a monthly close above 1.2000 for 1.2500.
Published on Mon, Jul 28 2008, 14:17 GMT
0
0
EUR/CAD
Mon, Jul 28 2008, 07:56 GMT
by Nicole Elliott
Comment: Pulling back and consolidating under April’s high at 1.6325 means the Euro is no longer overbought against the Canadian dollar. Although bullish momentum has collapsed we see this as a currency pair preparing for another lunge higher later this year. Bullish pressure should increase if we hold above the bottom edge of the ‘triangle’ or ‘pennant’ formation this summer, with a weekly and/or a monthly close above 1.6200 setting off a squeeze to key resistance around 1.6700. Above here on a first attempt is considered highly unlikely.
Strategy: Buy Euros and sell Canadian dollars at 1.5800, adding to 1.5500; stop below 1.5200. Add to longs on a weekly and then a monthly close above 1.6200 for 1.6400 short term and 1.6600/1.6700 medium term.
Published on Mon, Jul 28 2008, 07:56 GMT
0
0
NZD/CAD
Mon, Jul 28 2008, 07:50 GMT
by Nicole Elliott
Comment: From February to April the New Zealand formed a ‘quadruple top’ against its Canadian counterpart and the medium and long term trends are to a weaker Kiwi. Having crept sideways since May, things are on the move again helped by a decent Ichimoku ‘cloud’. Bearish pressure should accelerate if we now hold below 0.7600 and our medium term target is 0.7200, possibly last year’s low at 0.7100, where some consolidation should take place. Long term our target is 0.6600/0.6800 and maybe 0.6000 which is the lowest this cross has ever reached (summer 2000).
Strategy: Sell at 0.7500, adding to 0.7600; stop above 0.7785. Add to shorts on a weekly close below 0.7500 and again on a sustained break below 0.7300 for levels as above.
Published on Mon, Jul 28 2008, 07:50 GMT
0
0
CAD/JPY
Wed, Jul 23 2008, 14:05 GMT
by Nicole Elliott
Comment: Price action over the last nine weeks has been dreary and done nothing to change our view. Hopefully we are now in the final stages of the corrective bounce that started in March. We are watching for signs of topping between 107.00 and 109.60, ideally some sort of ‘spike high’. A weekly close below 102.00 should add very considerable downside momentum for a re-test of pivotal support around 97.00. The measured target remains at 90.00/92.00 and a final leg down to 85.00 cannot be ruled out.
Strategy: Sell at 107.00; stop above 110.55. Add to shorts on a weekly close below 102.00 for 96.00 short term and 90.00 further out.
Published on Wed, Jul 23 2008, 14:05 GMT
0
0
GBP/AUD
Mon, Jul 21 2008, 13:49 GMT
by Nicole Elliott
Comment: Having reached our short term target at 2.1000 we continue to pencil in another fall to 2.0000, last seen in March 1997. A big break below here on a first attempt looks unlikely because the 1.9800 area limited the downside on many occasions in the late 1980’s and early 1990’s (but note that in May 1996 the low was 1.8725). Below 1.9000, while considered unlikely this year, would see a seismic shift in the value of these two currencies and would be a terrifying prospect for many.
Strategy: Sell on a bounce to 2.0900; stop above 2.2000. Cover shorts between the psychological level at 2.0000 and 1.9500.
Published on Mon, Jul 21 2008, 13:49 GMT
0
0
NZD
Thu, Jul 17 2008, 13:36 GMT
by Nicole Elliott
Comment: The endless retreat from March’s high at 0.8215 is trying to base from support provided by the Ichimoku ‘cloud’. At the moment this is quite thin but notice how quickly it widens starting August. Therefore we shall allow for yet more work inside the ‘channel’ for another two weeks. The New Zealand dollar should then rally quickly to 0.7950 once trendline resistance is broken, a weekly close above the 26-week average at 0.7800 being the catalyst. We then favour a concerted attack on 0.8215 and 0.8270 (Q2 1982 high) late Q3 2008. Long term we feel there is still plenty more upside, here and in a vast array of currencies against the US dollar. Our upside targets are 0.8500, 0.9000 medium term and 0.9500 very long term where the Kiwi will lag its Australian counterpart.
A weekly close below 0.7500 forces us to review.
Published on Thu, Jul 17 2008, 13:36 GMT
0
0
SGD
Thu, Jul 17 2008, 10:57 GMT
by Nicole Elliott
Comment: Just when we thought it was running out of control, we have mercifully had two months’ worth of consolidation. This much needed breather above 1.3400 (our first measured target and its strongest ever at 1.3450) means the Singapore dollar is no longer overbought and we have reverted to ‘trend’ appreciation. If the expected generalised US dollar weakness we expect materialises over the coming months, this one should be well on its way to our long term target which remains at 1.2500.
A weekly close above 1.4000 forces us to review.
Published on Thu, Jul 17 2008, 10:57 GMT
0
0
AUD
Mon, Jul 14 2008, 13:14 GMT
by Nicole Elliott
Comment: The strongest weekly close ever and above the March 1984 high when it hit a record high 0.9650. Looking a bit like the Euro which also saw the highest weekly close ever after trading neatly sideways for seventeen weeks. This should add to bullish momentum and our measured target remains at US$0.9900 (and probably US$1.0000 just for the fun of it!). These may be extreme levels but at the moment there are few signs of instability here or in a whole raft of other currencies where we predict generalised US dollar weakness. The next question is whether consensus opinion will win out and US dollar weakness will reverse imminently, or whether once again its trend to chronic weakness is underestimated and that this will spiral out of control. We cannot rule out chaotic conditions later this year, especially towards year-end.
A monthly close below 0.9000 would suggest an important high is already in place. There is a small chance that while pushing higher this year, the move then fizzles out very rapidly indeed. Were this to be the case a monthly close below 0.9300 would complete a ‘spike high’ top.
Published on Mon, Jul 14 2008, 13:14 GMT
0
0
EUR/PLN
Wed, Jul 9 2008, 14:10 GMT
by Nicole Elliott
Comment: For the last four years the relentless strengthening of the Polish zloty has taken many, including ourselves, by surprise. The best performer among all major currencies, bar none! It is now stronger than it has ever been against the Euro, and close to a record versus the US dollar and sterling too (so no wonder Polish builders are returning home). Over the last five days the move has almost spiralled out of control and the Euro is extremely oversold. It all looks overdone and a correction overdue. Where this will start is anyone’s guess but it should be imminently. Watch for a reversal candle on the chart which should eventually see this cross back up at 3.7000 and probably no higher than 3.9000 in a year’s time.
A daily close above 3.3400 hints that an interim low is already in place while a monthly close below 3.3000 forces us to review what has been a very difficult currency pair.
Published on Wed, Jul 9 2008, 14:10 GMT
0
0
EUR/CZK
Wed, May 21 2008, 09:32 GMT
by Nicole Elliott
Comment: Since the Euro’s introduction the Czech koruna has gained 40% against it (and a staggering 64% against the US dollar over the last eight years). This impressive and relentless performance has stalled at the psychological 25.000 area and over the next few months we shall allow for a bout of consolidation, and maybe a correction later this year. Price action over the last fifteen weeks is a potential ‘rounded bottom’ or irregular inverted ‘head-and-shoulders’. Expect more work roughly between 24.500 and 26.000 for another month or so. Then possible a slow short squeeze to 26.500.
A monthly close below 24.500 means the downtrend has resumed.
Published on Wed, May 21 2008, 09:32 GMT
0
0
GBP/CHF
Wed, May 14 2008, 10:43 GMT
by Nicole Elliott
Comment: Last month’s rally from some of the lowest levels ever, has really been pathetic. It appears to have stalled at the pivotal 2.1200, one standard deviation from the mean of the last twenty years. Therefore we shall expect a test of 1.8000 later this year, possibly breaking below the all-time low of 1.7515 set in November 1995.
A monthly close above 2.1200 would force us to change tack completely.
Published on Wed, May 14 2008, 10:43 GMT
0
0
EUR/CHF
Wed, May 14 2008, 10:39 GMT
by Nicole Elliott
Comment: This year EUR/CHF has seen some of the biggest moves of the last a decade. Once again this cross is trading just below the pivotal area around 1.6300. Because of the thick Ichimoku ‘cloud’, and as we are forming a potential ‘head-and-shoulders’ top over the last three weeks, we expect a move lower later this month. Momentum should turn bearish on a daily close below 1.6100. The question then will be whether the next drop is as dramatic as the March one. Maybe, maybe not, but one-month at-the-money implied volatility should hold above 4.75% (one standard deviation above the mean of the last nine years. Realistically prepare for a very sudden collapse to 1.5800. After that moves should slow down allowing for a steady, long term decline to 1.5000.
Strategy: Sell at 1.6200, adding to 1.6300; stop above 1.6375. Add to shorts on a daily close below 1.6100 and again on a weekly close below 1.6000 for 1.5800 short term and then a lot more.
Published on Wed, May 14 2008, 10:39 GMT
0
0
AUD/JPY
Thu, May 8 2008, 09:13 GMT
by Nicole Elliott
Comment: Following the August 2007 dramatic sell-off to a low at 86.00, this currency pair has spent another eight months consolidating above 90.00. Note that on the way up in 2007 the pair took nine months, after breaking successfully above 90.00, to get to the high at 107.80. So while sideways work between 90.00 and 100.00 this year has tried the patience of many, it does make the pattern symmetrical in terms of time. We continue to see this as a massive ‘double top’ and we should get the weekly close below 90.00 that completes the pattern very shortly. Until then rallies to the psychological 100.00 are seen as good selling opportunities for a big slide lower later this year. Our measured targets are 82.00/80.00 medium term and 72.00 long term.
Strategy: Sell at 99.65/100.00; stop above 101.00. Add to shorts on a monthly close below 91.00 and on a weekly one below 90.00 for levels as above.
Published on Thu, May 8 2008, 09:13 GMT
0
0
AUD
Wed, Apr 23 2008, 14:03 GMT
by Nicole Elliott
Comment: Powering ahead to a new high for the year, in turn the Australian dollar’s best level against its US counterpart since March 1984 when it hit a record high 0.9650. Like the Canadian dollar and Swiss franc have done already, many are now talking parity here. Our view is unchanged and our measured target remains at US$0.9900 (and probably US$1.0000 just for the fun of it!). These may be extreme levels but at the moment there are few signs of instability here or in a whole raft of other currencies against the greenback. In fact the Australian dollar is currently not especially overbought having spent most of this year getting used to holding over 0.9000. Interesting too that at-the-money implied volatility is way below last year’s peaks, suggesting current price action is sustainable over the medium term. The next question is whether consensus opinion will win out and US dollar weakness will reverse imminently, or whether once again its trend to chronic weakness is underestimated and that this will spiral out of control. While not exactly favouring the latter, we do not rule it out.
A monthly close below 0.9000 would suggest an important high is already in place.
Published on Wed, Apr 23 2008, 14:03 GMT
0
0
CHF
Tue, Apr 22 2008, 14:30 GMT
by Nicole Elliott
Comment: A highly unusual Technical picture but it would appear that the very large Ichimoku ‘cloud’ has managed to cap the rally from the ‘spike low’ which started at a record 0.9572 Swiss francs per US dollar. The greenback is no longer oversold and bearish momentum, while less than it was in March, is still very strong. At-the-money implied volatility should hold around 12.00%, squeezing to 15.00% as we break to new lows. Note that open interest is less than half of what it was at least year’s peak, despite very good volume, US investors obviously having trouble with it trading under parity. Over the next month or two we shall allow for sideways work below 1.0300, down to what might be fairly good support around 0.9500. Long term there is a chance it will drop to 0.7500.
Strategy: Sell at 1.0100, adding to 1.0250; stop well above 1.0355. Add to shorts on a weekly close below 0.9850 for 0.9600 short term and then 0.9500 where all shorts should be covered on signs of stalling. Re-sell on a sustained break below here for 0.9000, then 0.8500 and maybe 0.7500 if bearish pressure rolls out of control.
Published on Tue, Apr 22 2008, 14:30 GMT
0
0
SGD
Mon, Apr 21 2008, 13:45 GMT
by Nicole Elliott
Comment: The Singapore dollar is trading at its strongest ever level against its US counterpart and has almost reached our measured target at 1.3400. More extraordinary is that rather than the pace slowing down at these extreme levels, it has actually increased significantly since September last year. The greenback is oversold but at the moment there seems little point trying to stop this juggernaut, especially seeing as bearish momentum is still stronger than it has been in years. Our long term target remains at 1.2500.
A weekly close above 1.4000 forces us to review.
Published on Mon, Apr 21 2008, 13:45 GMT
1
0
EUR/CAD Technical Analysis
Mon, Feb 18 2008, 14:42 GMT
by Nicole Elliott
Comment: November’s collapse to 1.3280 is seen as an ‘extension’ outside the long term trading band. The pair should move slowly up to 1.5500 over the next few months. If prices now hold above 1.4400 bullish pressure should increase a little, but only a sustained break below 1.4150 would force us to review. A weekly close above 1.5100 should set up for a break a move January’s high at 1.5200.
Published on Mon, Feb 18 2008, 14:42 GMT
0
0
EUR/CZK Technical Analysis
Thu, Feb 14 2008, 11:37 GMT
by Nicole Elliott
Comment: Since we last wrote up this pair in July the Czech koruna has gained 12% against the Euro and is the best performing Eastern European currency. Only the Yen and Swiss franc have managed to move this much against the US dollar, while the koruna gained 18% against the greenback. This staggering performance, which has taken the currency from a peak at 42.600 in 2000 to 17.250 today, was a surprise to us and is a worry for the Central Bank which is battling with inflation (CPI +7.5% Y/Y). While we would not recommend buying the currency at these extreme levels, at the moment there is nothing to suggest the trend is about to end. When it does we will know as it is likely to be a dramatic conclusion.
A monthly close above 26.650 will probably signal that an interim low price is in place.
Published on Thu, Feb 14 2008, 11:37 GMT
0
0
CHF/JPY Technical Analysis
Thu, Feb 7 2008, 15:21 GMT
by Nicole Elliott
Comment: Swiss/Yen, like other Yen crosses, spent much of 2007 forming a very large topping formation. This follows a five-wave rally that started in 2000 and came to a halt at the psychological level of 100.00 where it also was stopped dead in its tracks in 1998. It is currently lagging the other ones as both currencies have been used to fund the ‘carry trade’ but nevertheless looks like an irregular ‘head-and-shoulders’. A weekly close clearly below 97.00 might add some much-needed bearish momentum but only a monthly close below 94.50 completes the formation. Measured targets are 90.00, 87.00 and eventually 83.00.
Published on Thu, Feb 7 2008, 15:21 GMT
0
0
EUR/CHF Technical Analysis
Thu, Feb 7 2008, 15:16 GMT
by Nicole Elliott
Comment: The very large ‘head-and-shoulders’ top which took much of 2007 to build has resulted in the biggest monthly drop in a decade. This is seen as the start of the unwinding of the ‘carry trade’. For the first time in three years prices are trading below the Ichimoku ‘cloud’ which should now act as resistance. The bounce from the 1.5850 area is understandable as this was the high in 2004 as well as 2006: what was resistance becomes support. This week’s potential ‘spike high’ at 1.6200 suggests this level may cap this month. We see the drop moving back down to 1.5900/1.5850 and further out our target is 1.5600, possibly 1.5300 if enough momentum builds.
Published on Thu, Feb 7 2008, 15:16 GMT
0
0
Reuters February 2008 FX poll.
Thu, Feb 7 2008, 09:06 GMT
by Nicole Elliott
Reuters will be publishing their regular monthly FX poll Wednesday 6th February with estimates for four major currencies against the US dollar (in 1 to 12 months’ time). The Mizuho Corporate Bank entries are supplied from London and are based on Technical Analysis. You will also be able to see what the other 55 banks/forecasters are predicting; the mean, the maximum and the minimum forecasts for the different periods.
To see these please use a Reuters Quote Browser and type FOREXPOLL01 after 13:00 GMT.
Published on Thu, Feb 7 2008, 09:06 GMT
0
0
AUD/NZD Technical Analysis
Thu, Feb 7 2008, 08:45 GMT
by Nicole Elliott
Comment: Very dreary over the last two months but maybe some will have been lulled into a false sense of security. We continue to favour the Kiwi dollar over its Australian counterpart and feel that some time this year the pair will re-test key support between 1.0600 and 1.0400 (the all-time low).
Published on Thu, Feb 7 2008, 08:45 GMT
0
0
GBP/AUD Technical Analysis
Tue, Feb 5 2008, 09:08 GMT
by Nicole Elliott
Comment: We have been singularly unsuccessful forecasting this currency pair for many years and 2008 looks to be no exception. In what is seen as an important break below 2.3000, the Australian dollar should gain against the pound and our target remains at 2.1000 short term and then probably 2.0000. Below here on a first attempt looks unlikely but note that in May 1996 the low was 1.8725.
Published on Tue, Feb 5 2008, 09:08 GMT
0
0
CAD Technical Analysis
Thu, Jan 31 2008, 13:21 GMT
by Nicole Elliott
Comment: The much-needed year-end correction has stalled ahead of 1.0450, as expected. We have now started on our way down again and are currently dealing with a very fat Ichimoku ‘cloud’. Over the coming month we shall be watching for a drop to 0.9700, December’s low and the 50% Fibonacci retracement. Note that open interest is about half of last year’s peak so these positions need re-building. Some time in H1 2008 we favour a re-test of the 0.9200 area. Later this year lower still where our measured targets remain at C$0.9000 and probably C$0.8200 very long term.
Published on Thu, Jan 31 2008, 13:21 GMT
0
0
GBP/CHF Technical Analysis
Thu, Jan 31 2008, 13:15 GMT
by Nicole Elliott
Comment: Sterling’s rout against the Swiss franc, and most other major ones to boot, might have come to an abrupt halt at 2.1195, precisely one standard deviation from the mean. We have formed a ‘double bottom’ in January and the monthly candle looks as though will end up having a large ‘spike low’. Over the next three months or so we favour a rally back up to 2.3000/2.3400.
Published on Thu, Jan 31 2008, 13:15 GMT
0
0
GBP/JPY Technical Analysis
Wed, Jan 30 2008, 10:05 GMT
by Nicole Elliott
Comment: Leading the way lower after completing a very major, large ‘head-and-shoulders’ top in 2007. The first measured target at 205.00 has already been met and we feel this cross should consolidate above here for a few weeks (allowing other Yen pairs to catch up). Rallies to 220.00, and probably no higher than 224.00, are seen as excellent selling opportunities for a subsequent break even lower later this year. Expect some dithering at the psychological 200.00 level, then down to 190.00 and maybe 180.00 if enough momentum builds.
A weekly close above 224.00 would force us to review.
Published on Wed, Jan 30 2008, 10:05 GMT
0
0
AUD/JPY Technical Analysis
Wed, Jan 30 2008, 09:52 GMT
by Nicole Elliott
Comment: Variations on a theme: this one a massive ‘double top’. It is just a matter of time before we get the weekly close below 90.00 that completes the pattern. Until then rallies to 98.00, and no higher than the psychological 100.00, are seen as good selling opportunities for a big slide lower. Our measured targets are 82.00/80.00 medium term and 72.00 long term. Note that this is such a very massive and important top that this cross in unlikely to trade above 106.00 for years.
Published on Wed, Jan 30 2008, 09:52 GMT
0
0
SGD Technical Analysis
Fri, Jan 25 2008, 09:03 GMT
by Nicole Elliott
Comment: The Singapore dollar has been quietly and steadily gaining on its US counterpart and the monetary authorities have been mercifully silent. It appears to be leading the way this month, along with the Swiss franc, and we continue to target 1.4000, last seen in 1997. Assuming persistent and chronic, generalised US dollar weakness later this year, a move of the SGD to a new all-time low is also a very real possibility.
A weekly close above 1.4600 would postpone all of the above.
Published on Fri, Jan 25 2008, 09:03 GMT
0
0
NZD Technical analysis
Wed, Jan 16 2008, 12:57 GMT
by Nicole Elliott
Comment: Buying the New Zealand dollar on Q3 2007’s vicious sell-off was one of our better ideas and we continue to feel that Kiwi can and will move higher still. Amid generalised US dollar selling we expect a re-test of Q2 1982’s high at 0.8270. Note that between 1975 and 1980 it held around parity before March 1985’s floating regime was introduced with a devaluation to 0.4400. A monthly close above 0.7800 should set off the next rally, probably sooner rather than later considering we have wasted the last three months consolidating under 0.7900. Our upside targets are 0.8500, 0.9000 medium term and 0.9500 very long term.
A weekly close below 0.7500 forces us to rethink.
Published on Wed, Jan 16 2008, 12:57 GMT
0
0
AUD Technical analysis
Wed, Jan 16 2008, 12:52 GMT
by Nicole Elliott
Comment: The correction from last year’s high at 0.9400 is textbook stuff despite thin year-end conditions. Weak bullish momentum yet the Australian dollar is creeping steadily higher this month and looks set to up the pace a bit on a weekly close above 0.9000. The long term trend is to generalised and possibly chronic US dollar weakness so we feel the Australian dollar should rally to 0.9400/0.9500 in Q1 2008. Later this year we expect parity.
A weekly close below 0.8700 would postpone all of the above.
Published on Wed, Jan 16 2008, 12:52 GMT
0
0
EUR/CHF
Wed, Jan 16 2008, 11:31 GMT
by Nicole Elliott
Comment: A chart pattern that is becoming increasingly common in many different instruments: a ‘head-and-shoulders’ top. Price action in 2007 is seen as a massive top and the so-called ‘carry trade’, in all its many guises, looks set to unravel this year. The question now is, how quickly? Last week’s close clearly below the ‘neckline’ and long term trendline support completes the formation. Other instruments should follow where GBP/JPY has been leading for two weeks. Fifty and two-hundred day moving averages have turned negative and 1.6800 is close to some of the highest levels in over a decade. Our medium term target at 1.6200 has almost been reached already and we shall now see the drop continue to 1.5900. Even further out our target is 1.5600.
Strategy: Sell at 1.6260, adding to 1.6385; stop well above 1.6450. Add to shorts on a weekly close below 1.6200 and again on a break below 1.6160 for 1.levels as above.
Published on Wed, Jan 16 2008, 11:31 GMT
Archive
Mizuho Corporate Bank
| 1-3-3, Marunouchi, Chiyoda-ku, Tokyo 100-8210
http://www.mizuho-cb.co.uk | Nicole.Elliot@mhcb.co.uk
Legal disclaimer and risk disclosure
The information contained in this page is based on or derived from information generally available to the public from sources believed to be reliable. No representation or warranty is made or implied that it is accurate or complete. Any opinions expressed in this paper are subject to change without notice. This page has been prepared solely for information purposes and if so decided, for private circulation and does not constitute any solicitation to buy or sell any instrument, or to engage in any trading strategy.Interested in forex trading? forex brokerage firms!
GET CASH BACK FOR YOUR TRADES! Learn more about the Pip Rebate Program
Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.
Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. FXstreet.com has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website, by FXstreet.com, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXstreet.com will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
©2009 "FXstreet.com. The Forex Market" All Rights Reserved.