EUR: Possibly attempt small longs at 1.4390; stop below 1.4335

Nicole Elliott from Mizuho Corporate Bank at 01/18/10

Comment: Last week’s ‘spike high’ against the 26-week moving average at 1.4575 suggests the Euro will hold below here for at least another week despite all other elements of this chart suggesting a long Euro position. Unlikely to break above here today though a weekly close above 1.4500 might still be possible. Mixed at best today.

Strategy: Possibly attempt small longs at 1.4390; stop below 1.4335. Short term target 1.4460, then 1.4550.

Comment: Approaching the lower edge of a shrinking Ichimoku ‘cloud’, last week’s ‘bearish engulfing’ candle turning momentum bearish. Moving averages suggest a short position average and other crosses support this view.

Strategy: Sell at 130.86 adding to 131.25; stop above 132.55. Short term target 130.00/129.60, then 127.25.

Comment: Now that consensus opinion is firmly against sterling and the yen, these were last week’s best performers, reversing their position in December. Cable is struggling with a large Ichimoku ‘cloud’ and moving averages have crossed to bullish. Note the daily ‘cloud’ narrows sharply by the 26th of this month so prices should be able to break through it eventually.

Strategy: Attempt longs at 1.6300, adding to 1.6255; stop well below 1.6200. Add to longs on a sustained break above 1.6415 for 1.6555 short term.

Comment: Hovering at the lower levels of the last three weeks, just under the 26-day moving average at 91.05 today, and below the 9-day one. Last week’s close just below 91.00 has turned momentum bearish, many yen crosses having ‘bearish engulfing’ weekly candles. We also have a small potential ‘head-and-shoulders’ topping pattern whose measured target is at least 89.00, probably just under 88.00.

Strategy: Sell at 90.95, adding to 91.30; stop above 92.05. Short term target 90.75, then 90.00.