GBP: Attempt small longs at 1.6560; stop below 1.6400

Nicole Elliott from Mizuho Corporate Bank at 11/24/09

Comment: Still well bid and not overbought, though bullish momentum is low. It looks as though we are setting up for a re-test this year’s high at 1.5064. Rising trendline and the Ichimoku ‘cloud’ should also provide support and suggest a long position for a break to new highs later on.

Strategy: Strategy remains unchanged: attempt longs at 1.4930; stop below 1.4800. Short term target 1.5000/1.5055, eventually more.

Comment: Dropping below a very thin daily Ichimoku ‘cloud’, though still within this month’s range. Bearish pressure has increased a little and the Euro is not oversold. Things might get a little more interesting should USD/JPY drop below 88.00.

Strategy: Attempt shorts at 132.40, adding to 133.50; stop above 134.05. Short term target 132.00/131.75, then more.

Comment: Stabilising sooner than we had thought, ahead of first Fibonacci retracement support. Allow for more random work around current levels today.

Strategy: Attempt small longs at 1.6560; stop below 1.6400. First target 1.6700, then 1.6800.

Comment: Glacial pace but sliding inexorably towards October’s low at 88.01 followed by a serious downside test of key support at 87.00 (and then 85.00). The US dollar is not oversold and momentum is steadily bearish.

Strategy: Sell at 88.70/89.15; stop well above 89.75. Short term target 88.25/88.00, eventually 87.25/87.00.