JPY: Attempt shorts at 89.25; stop above 90.05

Nicole Elliott from Mizuho Corporate Bank at 10/11/09

Comment: Stalling just ahead of this year’s high at 1.4845 and a potential small ‘double top’. This suggests 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 the tiniest of shorts at 1.4725, adding to 1.4800; stop/reverse above 1.4845. Cover between 1.4650 and 1.4600 and watch for signs of basing before going long.

Comment: After three serious downside tests of trendline support it looks as though we will not get the break lower this week. Yen crosses are very mixed with some hovering close to this year’s highs and other currencies trading closer to this year’s lower levels. A weekly close below 129.00 is needed to send this pair lower as we continue to expect but have postponed the move to next week or the one after that.

Strategy: Possibly attempt small shorts at 131.35; stop above 132.25. Short term target 130.00 then 129.00.

Comment: From a potential ‘pennant’ Cable has morphed into a potential ‘flag’ in what is a very mixed Technical picture. We urge extreme caution and a flexible outlook. While below the ‘neckline’ of the potential head-and-shoulders top 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: Do nothing. If you really have to possibly attempt tiny shorts at 1.6000; stop above 1.6200. Short term target 1.5950.

Comment: Another strong intra-day rally was stalled by the 9-day moving average and the top of the ‘triangle’. The US dollar is no longer oversold and bearish momentum remains steady; a weekly close below 88.75 would add to this.

Strategy: Attempt shorts at 89.25; stop above 90.05. Short term target 88.60, then 88.00.