EUR: Attempt small longs at 1.3650

Nicole Elliott from Mizuho Corporate Bank at 02/16/10

Comment: Some are wondering why the Euro hasn’t dropped further with Greek woes looming. Yesterday’s price action is technically irrelevant, but no lower than Friday’s small ‘hammer’ low at 1.3532. We continue to urge extreme caution and watch for signs of a dramatic reversal, so that we form a big ‘spike low’ probably this week. A daily close above the 9-day moving average at 1.3716 would be a good start.

Strategy: Attempt small longs at 1.3650; stop below 1.3500. Short term target 1.3700/1.3750, then 1.3850.

Comment: ‘Triangle’ consolidation above ‘channel’ support, still stuck under the 9-day moving average at the centre of the formation. The Euro is marginally oversold and bearish momentum has eased considerably. Expect yet more hesitation in a small range around current levels today while allowing for a short squeeze towards 125.00.

Strategy: Possibly attempt small longs at 122.55; stop below 121.25. First target 124.15, maybe 125.00.

Comment: Alternating up and down days around the pivotal 1.5700 level, what had been the lower edge of the band that had held since July 2009, in a small ‘triangle’ or potential ‘pennant’. The 9-day moving average is hurtling down to current prices. Wait and watch for much clearer signs of forming an interim low, hopefully this week.

Strategy: Possibly attempt small longs at 1.5715; stop below 1.5500. Short term target 1.5750/1.5800, then 1.5900.

Comment: Zero movement yesterday and still holding between 50% and 38% Fibonacci support. Friday’s high at 90.43 is a small ‘spike high’ and the 26-day moving average has dipped to 90.49; this might prove to be a new interim high even though it’s fairly unimpressive.

Strategy: Attempt small shorts at 89.80/90.15; stop above 90.65. Short term target 89.30, then 88.80/88.55.