EUR: Possibly attempt tiny longs at 1.4870; stop below 1.4700

Nicole Elliott from Mizuho Corporate Bank at 11/06/09

Comment: Indecision with yesterday’s ‘doji’ candle. Bullish pressure might increase fractionally if we hold above the 50-day moving average at 1.4700.

Strategy: Possibly attempt tiny longs at 1.4870; stop below 1.4700. Short term target 1.4900/1.4930.

Comment: Still thrashing around in the middle of this year’s broad range. 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 134.50; stop above 135.85. Short term target 132.00, then 131.00, eventually another big slide lower still.

Comment: Within a whisker of testing important resistance around 1.6665, but only a weekly close above here, followed by a weekly close above 1.6835, will really increase bullish momentum.

Strategy: Possibly attempt small longs at 1.6595; stop well below 1.6400. First target 1.6665.

Comment: Little to add as we consolidate under a small ‘spike high’, but note the descending lower edge of the very large Ichimoku ‘cloud’. If risk appetite and the carry trade are alive and kicking, then why aren’t investors selling the Yen? Time to drop below 90.00 and set up for another cautious downside test of key support.

Strategy: Sell at 90.50; stop above 91.05. Short term target 89.85, then 89.25.