EUR: Attempt small longs at 1.4960; stop below 1.4800

Nicole Elliott from Mizuho Corporate Bank at 11/17/09

Comment: Despite intra-day nervousness the 9-day moving average has managed to limit the downside. No guarantees this will do the trick again today but a test of this year’s high at 1.5064 looks imminent. Obviously in order to break to new highs strong daily and weekly closes are needed, here and in a series of other currencies.

Strategy: Attempt small longs at 1.4960; stop below 1.4800. Short term target 1.5000/1.5055, eventually more.

Comment: A series of lower daily highs might help to tip the balance and push this pair lower as we have been predicting for much too long. This ought to be mirrored in all yen crosses, helping nudge one another down.

Strategy: Attempt small shorts at 133.15, adding to 134.15; stop above 135.25. Short term target 133.00, then 132.00, then more.

Comment: The fourth highest daily close this year as the 9-day moving average pushes Cable higher. It is still worth less than half of 2007’s peak, while other currencies are trading closer to 75% Fibonacci retracement levels, so still plenty of room for recovery. A weekly close above 1.7000 would give it a big kick towards 1.8500.

Strategy: Buy at 1.6855, adding to 1.6800; stop below 1.6700. First target 1.7000/1.7050, eventually more.

Comment: A daily close clearly below most of those seen since September and one of the lowest this year. Strangely bearish momentum has not increased though the USD is not oversold either. We favour a sharp drop and a serious downside test of key support at 87.00 (and then 85.00) this week and through to December. Remember, thin markets will exacerbate moves.

Strategy: Sell at 89.00 but only if prepared to add to 89.65; stop well above 89.75. Short term target 88.25/88.00, eventually 87.25/87.00.