EUR/JPY: Attempt shorts at 134.70/135.00; stop above 135.25

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

Comment: Very close to this year’s high at 1.5064 amid generalised US dollar weakness. The Euro is not overbought and bullish pressure has increased slightly, as should implied volatility. High futures volume over the last two weeks suggest many are new to the party.

Strategy: Attempt small longs at 1.5000, adding to 1.4950; stop below 1.4750. Short term target this year’s high at 1.5064, then more.

Comment: Stuck in the middle of the large ‘triangle’ that has dominated for months. With momentum just bearish, the Euro not oversold against the Yen, and a small ‘spike high’ Wednesday should sent this pair back down to 132.00, and eventually more.

Strategy: Attempt shorts at 134.70/135.00; stop above 135.25. Short term target 133.50, then 132.00.

Comment: Despite yesterday’s close above 1.6665, small signs of instability this morning. Otherwise, all elements on this chart are suggesting long positions.

Strategy: Attempt small longs at 1.6645; stop well below 1.6500. First target 1.6775, then this year’s high at 1.7044.

Comment: Stuck under the moving averages and the descending lower edge of a very large Ichimoku ‘cloud’, yet refusing to succumb and drop as we still expect. Momentumis bearish and the USD is certainly not oversold. Time for generalised USD selling again today and maybe all this week.

Strategy: Sell at 89.85/90.00; stop above 90.40. Short term target 89.65, then 89.25.