EUR: Attempt small longs at 1.4665; stop below 1.4575

Nicole Elliott from Mizuho Corporate Bank at 12/14/09

Comment: One of the biggest fortnightly pullbacks so far this year should send jitters down the spines of many. We see this as a normal correction in thin year-end conditions and the Euro will try and stabilise against the lower edge of the Ichimoku and retracement support.

Strategy: Attempt small longs at 1.4665; stop below 1.4575. Short term target 1.4800, then 1.5000.

Comment: Hovering just under the lower edge of a very messy band that has held for most of this year, clinging to the bottom of a very large Ichimoku ‘cloud’. Pity we didn’t get the weekly close below 127.75 which might tip the balance and push this one down sharply at year-end. Maybe this week.

Strategy: Attempt small shorts at 130.00/130.50; stop above 131.65. Add to shorts on a sustained break below 129.00 to cover ahead of 127.00.

Comment: Hovering at the bottom of the Ichimoku ‘cloud’ and above the 61% retracement support of the previous rally. The move is corrective so watch once again for signs of forming an interim base today and maybe through to year-end. Beware thin year-end markets.

Strategy: Possibly attempt small longs at 1.6235; stop below 1.6100. First target 1.6345 then 1.6600.

Comment: Stuck between the 50% retracement support and the 9-day moving average at 87.80, and probably capped by a thin Ichimoku ‘cloud’. December’s rally, here and in the CHF and Dollar Index, are seen as an A, B, C-type correction which ought to end imminently.

Strategy: Attempt small shorts at 88.65 but only if prepared to add to 89.80; stop above 91.00. Short term target 88.00, then 86.00.