EUR: Possibly attempt small shorts at 1.4710, adding to 1.4760

Nicole Elliott from Mizuho Corporate Bank at 10/12/09

Comment: Stuck between this year’s high at 1.4845 (and a potential small ‘double top’) and above the 9-day moving average as weaker currencies are hit first. We shall continue to pencil in another week or two of consolidation which would allow the Ichimoku ‘cloud’ and trendline support to move closer to the Euro. Until the Euro manages a daily (and preferably weekly) close above 1.4800 we cannot rule out another test of support between 1.4600 and 1.4400.

Strategy: Possibly attempt small shorts at 1.4710, adding to 1.4760; stop/reverse above 1.4845. Cover between 1.4650 and 1.4600 and watch for signs of basing before going long.

Comment: Having decided that Yen crosses were not going to break lower, this one has snapped back to the bottom of the Ichimoku ‘cloud’. Watch for slow signs of forming an interim top this week.

Strategy: Possibly attempt small shorts at 132.75; stop above 133.15. Short term target 131.50/131.00.

Comment: Testing the bottom of a potential ‘flag’, below the ‘neckline’ of the potential head-and-shoulders top, and we shall continue to allow for another downside probe of medium term Fibonacci retracement support first, and a rally to new highs later this year.

Strategy: Possibly attempt small shorts at 1.5825; stop above 1.6135. Short term target 1.5800, probably 1.5700.

Comment: Having realised we were not going to break lower, dollar/yen is now testing trendline resistance. Bearish momentum has almost disappeared but then the US dollar is no longer oversold. Prices are likely to hold above 89.00 this week, with rallies probably stalling around 91.00/91.60. These are seen as selling opportunities for another downside re-test later this year.

Strategy: Possibly attempt shorts at 90.18; stop above 90.55. Short term target 89.50, then 88.50.