JPY: Attempt small shorts at 89.95; stop above 90.90

Nicole Elliott from Mizuho Corporate Bank at 12/07/09

Comment: Despite Friday’s fairly sharp sell-off, the medium term Technical picture has not changed. Though the Euro has dipped below ‘channel’ support it looks as though the top of the Ichimoku ‘cloud’ and retracement support will hold.

Strategy: Buy at 1.4890; stop below 1.4770. Short term target 1.5000, then 1.5050.

Comment: So frustrating as Yen crosses have bounce by a lot more than we had allowed for and move back inside the trading ranges that have dominated so far this year. Once again we find ourselves looking for interim highs.

Strategy: The idea is to trade the range roughly between 129.00 and 135.50.

Comment: Dropping sharply from the top of a sort of ‘flag’ since November, a continuation pattern that should eventually lead to a re-test of this year’s high at 1.7044. It is not overbought though bullish momentum is poor.

Strategy: Attempt small longs at 1.6480; stop below 1.6350. First target 1.6680 then 1.6800.

Comment: Bouncing way beyond what we had thought possible, retracing 78.6% of the previous decline, yet stalling at a rather thin Ichimoku ‘cloud’. This is expected to hold again today and maybe all week, and note that it drops sharply at the end of this month.

Strategy: Attempt small shorts at 89.95; stop above 90.90. Short term target 89.50, then 88.50.