EUR: Possibly attempt tiny longs at 1.3915; stop well below 1.3800

Nicole Elliott from Mizuho Corporate Bank at 01/07/10

Comment: Consolidating in a small rather nasty little ‘triangle’ below the top of a large Ichimoku ‘cloud’ and Fibonacci resistance. Moving averages are bullish yet the Euro has not managed to gather any upside momentum for weeks. As the lower edge of the Ichimoku ‘cloud’ drops towards 1.3200 over the next six weeks, allow for a shake-up of the complacent and a proper clear out. Later this year the Euro should strengthen so it might be a good idea to buy volatility for this period.

Strategy: Possibly attempt tiny longs at 1.3915; stop well below 1.3800. Short term target 1.4050.

Comment: Bouncing from the bottom of the daily Ichimoku ‘cloud’, the sudden sharp moves suggesting this market is looking for direction. Note that other Yen crosses are trading higher, some to levels higher than anything last year (mainly other Asian currencies).

Strategy: Possibly attempt small shorts at 133.20; stop above 133.85. Short term target 131.50.

Comment: This week’s worst performing major currency, struggling below a decent-sized daily Ichimoku ‘cloud’. This could continue for some time.

Strategy: Possibly attempt small longs at 1.5945; stop below 1.5800. First target 1.6050 then 1.6240.

Comment: ‘Triangle’ consolidation this week around the 9-day moving average and now testing immediate trendline support. A daily close below here might see momentum turn bearish.

Strategy: Attempt shorts at 92.15; stop above 92.80. Short term target 91.25/91.00, then 90.00.