Mizuho Corporate Bank

EUR
Comment: Yesterday’s new all-time high of 1.3787 then turned into a ‘spike high’. Many will probably be tempted to call this an interim top, but we urge caution. We feel we are more likely to consolidate below here today prior to squeezing higher again on Friday. At-the-money implied volatility is likely to move up to 6.50%.

Strategy: Attempt longs at 1.3755; stop well below 1.3700 to re-buy at 1.3600; stop below 1.3550. Target record high 1.3787, then 1.3875 and then 1.4000.

EUR/JPY
Comment: An amazing rebound after yesterday’s early morning jitters. If not today then maybe tomorrow expect another upside probe.

Strategy: Possibly attempt small longs at 168.00 but be prepared to add to 167.50; stop well below 167.00. Cover ahead of 168.50 but look to re-buy on a sustained break above 168.75 for 170.00/170.50.

GBP
Comment: Squeezing to 2.0363 yesterday, its highest since June 1981, with the move above the ‘flag’ equal to the rally below it. Expect consolidation below here this morning but over the next ten days there is a chance of a squeeze to 2.0500.

Strategy: Attempt tiny longs at 2.0315, adding to 2.0250; stop well below 2.0200. Target 2.0236 (?) and possibly 2.0400.

JPY
Comment: Rebounding very strongly using support from the top of the Ichimoku ‘cloud’. Expect smaller moves today, with prices holding roughly between 122.00 and 122.50 this morning. Then probably a cautious upside probe towards 123.00.

Strategy: Possibly attempt small longs on a dip to 122.20; stop/reverse below 121.88 for 121.00. Cover longs ahead of 123.00.