JPY: Possibly attempt small shorts at 90.85; stop above 91.85

Nicole Elliott from Mizuho Corporate Bank at 10/19/09

Comment: Consolidating neatly under 1.4968, which was also an interim high in November 2007. The Euro is not so overbought and is clinging to the 9-day moving average – which has done an excellent job limiting intra-day lows this month. Expect a little more consolidation prior to another break higher, dips hopefully contained by the 26-day average at 1.4723.

Strategy: Attempt small longs at 1.4885; stop below 1.4800, then watch for signs of forming a new interim low. Short term target 1.4950.

Comment: Once again very difficult as we stall around the mid-point of the broad range that has held since late March. Without holding our breath, we shall watch for signs of forming an interim top – yet again.

Strategy: Do nothing if you can, or attempt tiny shorts at 135.25; stop above 136.25. Short term target 133.00.

Comment: Last week’s rally from first medium term Fibonacci retracement support (38%) formed a large ‘bullish engulfing’ candle on the weekly chart, culminating in a close above the ‘neckline’ of an irregular ‘head-and-shoulders’. This pretty much cancels out the downside pressure supplied by this chart formation and underlines the fact that the very long term trend for Cable is higher. Very good volume in the futures contract suggest Americans are buying sterling as it is the only currency they can cheaply diversify into. Allow for more work this month inside the massive weekly Ichimoku ‘cloud’.

Strategy: Possibly attempt small longs at 1.6285, adding to 1.6200; stop well below 1.6100. First target 1.6400.

Comment: Last week’s bounce is corrective, stalling ahead of first Fibonacci resistance, below the Ichimoku ‘cloud’, and moving averages still suggest a short position. Watch for signs of topping this week, noting that the US dollar is now overbought.

Strategy: Possibly attempt small shorts at 90.85; stop above 91.85. Short term target 90.00, then 89.50.