Short Sterling – March 2010

Nicole Elliott from Mizuho Corporate Bank at 12/02/09

Comment: Calendar spreads narrowing significantly, red contracts rallying by more than front ones, as rose-tinted spectacles fall off. Rising open interest in most contracts suggests extreme caution. All elements on this chart point tot a long position, the Lagging Span hopefully getting support from Fibonacci retracement and October’s candles. As always, red months have more scope still.

Strategy: Attempt small longs at 99.260/99.230; stop below 99.150. Target 99.350 and then 99.450/99.520.