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EUR: Attempt longs at 1.5000, adding to 1.4900; stop below 1.4800

Nicole Elliott from Mizuho Corporate Bank at 11/25/09



Comment: Still well bid as benign neglect surrounds the US dollar. The euro is not at all overbought, though bullish momentum is low. It looks as though we are setting up for a re-test this year’s high at 1.5064. Rising trendline and the Ichimoku ‘cloud’ should also provide support and suggest a long position for a break to new highs later on.

Strategy: Attempt longs at 1.5000, adding to 1.4900; stop below 1.4800. Short term target 1.5050, eventually more.


Comment: Unimpressive as we consolidate under a very thin daily Ichimoku ‘cloud’ at the lower end of the range of the last month. Bearish pressure has increased a little again and the Euro is not oversold. Things might get a little more interesting should USD/JPY drop below 88.00, hopefully pushing this pair (and other yen crosses) under 131.00.

Strategy: Strategy remains unchanged: attempt shorts at 132.40, adding to 133.50; stop above 134.05. Short term target 132.00/131.75, then more.


Comment: Stabilising sooner than we had thought, ahead of first Fibonacci retracement support. Allow for a test of the 9-day moving average at 1.6670 this morning, maybe a little more, as US generalised US dollar weakness remains the dominant long term theme.

Strategy: Attempt small longs at 1.6640; stop below 1.6400. First target 1.6700, then 1.6800.


Comment: Getting there – slowly - sliding inexorably towards October’s low at 88.01. We continue to wait for a serious downside test of key support at 87.00 (and then 85.00). The US dollar is not yet oversold and momentum is steadily bearish. One-month at-the-money imp-lied volatility is back down to the long term mean.

Strategy: Sell at 88.70/89.15; stop well above 89.75. Short term target 88.25/88.00, eventually 87.25/87.00.

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