EUR: Possibly attempt small longs at 1.4740; stop below 1.4620

Nicole Elliott from Mizuho Corporate Bank at 11/04/09

Comment: Good futures volume over the last five days as recent longs get stopped out on the break below 1.4680. The Euro has now bounced from Fibonacci and channel support at 1.4626 and likely to hold above here today. We continue to see the latest decline as corrective but are not sure where we will form an interim base.

Strategy: Possibly attempt small longs at 1.4740; stop below 1.4620. Short term target 1.4855, maybe 1.4900.

Comment: Hovering in the middle of this year’s broad range. Hopefully the widening Ichimoku ‘cloud’ will start to exert more downside pressure over the coming week. Note that momentum has just turned bearish and the Euro is currently not oversold against the Yen.

Strategy: Attempt shorts at 133.45, adding to 134.00; stop above 134.65. Short term target 132.00, then 131.00, eventually another big slide lower still.

Comment: Bouncing strongly from the recent low at 1.6250 but this is no reason to become complacent. Cable is still trapped below important resistance around 1.6665 and further cautious downside probes cannot be ruled out. Nevertheless we continue to favour the building of a new interim low this month where short term watch support around 1.6200; medium term the 1.5900 area is key.

Strategy: Attempt small longs at 1.6365; stop well below 1.6200. First target 1.6600/1.6665.

Comment: Still hovering slightly unstably at the 26-day average at 90.17, under a very large Ichimoku ‘cloud’ and the 9-day moving average which has yet to turn bearish. The US dollar is still not oversold and momentum has yet to turn bearish so today expect a slow drop towards 89.65, below which downside pressure should kick in properly. Expect repeated cautious downside testing of a series of key support levels between 89.00 and 87.00 this month, then lower to key 85.00 towards year-end.

Strategy: Attempt shorts at 90.35/90.50; stop above 91.25. Short term target 89.65, then 88.60.