EUR/JPY: Attempt shorts at 135.45; stop above 137.55

Nicole Elliott from Mizuho Corporate Bank at 10/28/09

Comment: Dropping to the 26-day at 1.4770, giving up 50% of the most recent gains. The Euro is no longer overbought and bullish momentum is almost nil. Expect it to try and hold at current levels today.

Strategy: Possibly attempt small longs at 1.4835; stop below 1.4760. Short term target 1.4875, then 1.5055.

Comment: Retreating from the top of this year’s very large ‘triangle’, plunging through the 9-day moving average towards a relatively thin Ichimoku ‘cloud’. We shall continue to watch for stronger and more conclusive signs of toping on all yen crosses throughout this week.

Strategy: Attempt shorts at 135.45; stop above 137.55. Short term target 135.00, then 133.75.

Comment: Trapped between a strengthening US dollar and a strengthening pound. Also stuck between first Fibonacci support and the bottom of the Ichimoku ‘cloud’. Cable is no longer overbought though momentum is zero. Allow for more of the same today.

Strategy: Strategy remains unchanged: attempt small longs at 1.6350; stop well below 1.6200. First target 1.6550 then 1.6650.

Comment: Retreating from the 38% Fibonacci retracement resistance and the increasingly large Ichimoku ‘cloud’, as expected. Allow for some more consolidation this morning, roughly between the 9-day moving average at 91.20 and the lower edge of the ‘cloud’ at 92.00; then down again towards the 26-day average at 90.17.

Strategy: Attempt shorts at 91.35, adding to 92.00; stop above 92.55. Short term target 91.00, then 90.20.