EUR: Attempt tiny longs at 1.3715

Nicole Elliott from Mizuho Corporate Bank at 02/09/10

Comment: Everyone’s current ‘pet hate’ and though bearish momentum is still terribly strong it does smack of a very crowded trade with almost record futures volume. Be careful and watch for signs of a dramatic reversal, so that we form a big ‘spike low’ probably this week.

Strategy: Attempt tiny longs at 1.3715; stop below 1.3600. Short term target 1.3750, then 1.3850.

Comment: Trading under the 38% Fibonacci retracement and the lowest price since May last year. Nothing yet but we continue to wait and watch for signs of forming a sort of ‘spike low’. Nerves of steel and patience needed, something futures traders obviously don’t have as almost record volume and soaring open interest suggest many are rushing in.

Strategy: Possibly attempt tiny longs at 1.5635; stop well below 1.5500. Short term target 1.5750/1.5800.