EUR: Possibly attempt small longs at 1.4550; stop below 1.4500

Nicole Elliott from Mizuho Corporate Bank at 12/16/09

Comment: US dollar bulls getting very excited and many are calling for the greenback to strengthen throughout 2010. WE disagree and see this current pullback as corrective. Where we will stabilise in thin year-end markets is problematic but ought to be against retracement support.

Strategy: Possibly attempt small longs at 1.4550; stop below 1.4500. Short term target 1.4665, then 1.4850.

Comment: Hovering in a potential inverted ‘pennant’ at the lower edge of a very broad band that has held for most of this year. Momentum is neutral though.

Strategy: Attempt shorts at 130.25/130.50; stop above 131.65. Add to shorts on a sustained break below 129.00 to cover ahead of 127.00.

Comment: Going precisely nowhere while peripheral currencies are targeted. Trying badly to cling to the bottom of a thin Ichimoku ‘cloud’ and above the 61% retracement support. We continue to watch for signs of forming an interim base today with good volume in the futures market over the last week suggesting many are confused by Cable.

Strategy: Attempt small longs at 1.6265; stop below 1.6100. First target 1.6325 then 1.6600.

Comment: Nothing to add as we continue in ‘triangle’ consolidation under a thin Ichimoku ‘cloud’ in an A, B, C-type correction which ought to end imminently. The move is expected to be mirrored in the Yen crosses and led by JPY.

Strategy: Attempt small shorts at 89.50; stop above 90.00. Short term target 88.50, then 87.70.