EUR: Possibly attempt small longs at 1.3670

Nicole Elliott from Mizuho Corporate Bank at 02/12/10

Comment: This week’s ‘pet hate’ remains stuck between Friday’s low at 1.3585 and the 9-day moving average, no doubt to the frustration of the all-too many who relish the potential crumbling of the Eurozone. We continue to urge extreme caution and watch for signs of a dramatic reversal, so that we form a big ‘spike low’ probably this week or next. Note that the Euro is oversold again though bearish momentum has halved.

Strategy: Possibly attempt small longs at 1.3670; stop below 1.3550. Short term target 1.3800/1.3850.

Comment: Holding above ‘channel’ support but still stuck under the 9-day moving average at 123.84. The Euro is marginally oversold and bearish momentum has eased considerably. Expect yet more hesitation in a small range around current levels today while allowing for a short squeeze towards 125.00.

Strategy: Possibly attempt small longs at 122.70; stop below 121.50. First target 124.15, maybe 125.00.

Comment: Alternating up and down days as Cable thrashes around 1.5700, what had been the lower edge of the band that had held since July 2009. Wait and watch for much clearer signs of forming an interim low, maybe next week, involving a weekly close above 1.6000.

Strategy: Possibly attempt very small longs at 1.5685; stop below 1.5500. Short term target 1.5750/1.5800, then 1.5900.

Comment: Very steady and quite frankly, boring. Still holding above 50% Fibonacci support and above the bottom edge of a good-sized Ichimoku ‘cloud’, trading in relatively small daily ranges. Struggling under yesterday’s high at 90.15. Today we favour a test of the flat-bottomed ‘cloud’.

Strategy: Attempt shorts at 89.75; stop above 90.25. Short term target 89.30, then 88.80/88.55.