EUR: Buy at 1.4955, adding to 1.4845; stop below 1.4745

Nicole Elliott from Mizuho Corporate Bank at 10/15/09

Comment: Pushing relentlessly higher as the reluctant are dragged in kicking and screaming. It is of course just one of many currencies hitting a new high for the year against the US dollar. Yesterday’s close above 1.4900 adds weight to our view that we have started the next leg of a long term rally; a weekly close above 1.4800 would confirm. Bullish momentum has increased a little again but the Euro is overbought. More of the same today.

Strategy: Buy at 1.4955, adding to 1.4845; stop below 1.4745. Add to longs on a break above 1.4975 for 1.5000/1.5085 short term and then 1.5245.

Comment: Rallying by more than expected, dragged higher by AUD/JPY, NZD/JPY and NOK/JPY which are setting new highs for this year. Nevertheless we continue to watch for slow signs of forming an interim top, here and against other major currencies, this week.

Strategy: Possibly attempt small shorts at 133.75; stop above 134.45. Short term target 132.25, maybe 131.75.

Comment: Rallying from first medium term Fibonacci retracement support (38%) US dollar weakness gains the edge over sterling weakness. This tussle should continue for several weeks making trading Cable more difficult than other currencies. A daily close above 1.6125 should turn momentum bullish.

Strategy: Possibly attempt small longs at 1.6080; stop below 1.5800. First target 1.6125, maybe 1.6225.

Comment: Little to add despite nasty intra-day moves yesterday. Prices are holding under the 26-day moving average and trendline resistance. Bearish momentum is fractionally stronger and the US dollar is no longer oversold, with a daily close below the 9-day moving average at 89.24 possibly tipping it south. While below 90.50 downside pressure should increase.

Strategy: Attempt shorts at 89.45, adding to 90.00; stop above 90.55. Short term target 88.25/88.00.