Mizuho Corporate Bank

EUR
Comment: Tiny signs of instability below the all-time high at 1.3834. The Euro is overbought and bullish momentum has eased slightly. Immediate upside pressure is maintained while above 1.3700.

Strategy: Attempt small longs at 1.3790, adding to 1.3760; stop below 1.3670. Target record high 1.3834, then 1.3875 and then 1.4000.

EUR/JPY
Comment: Consolidating neatly in a ‘triangle’ under the all-time high at 168.95 and above the 9-day moving average at 167.73. However, as other Yen crosses have met our very long term long held targets, a more cautious approach is warranted. If we can hold above 167.50 again today another upside probe is likely. The Euro is no longer overbought against the Yen and we maintain our target at 170.00 for some time this month.

Strategy: Strategy remains unchanged: attempt small longs at 168.00, adding to 167.75/167.50; stop well below 167.00. Cover ahead of 168.95 but look to re-buy on a sustained break above 169.15 for 170.00/170.50.

GBP
Comment: Expect more consolidation under 2.0550 today. A drop through yesterday’s low at 2.0460 to 2.0400 is likely. After the spectacular rally of the last four weeks we are currently a lot more cautious short and medium term. Long term we feel there is still more upside.

Strategy: Possibly attempt tiny shorts at 2.0520; stop/reverse above 2.0555 for 2.0700. Cover shorts between 2.0460 and 2.0400 and watch for signs of basing between 2.0400 and 2.0300.

JPY
Comment: Still holding above the top of the Ichimoku ‘cloud’ (121.62 today) and momentum is just bearish. The moving averages have turned negative and the longer we hold below these the sooner we are likely to drop below 120.00 (last week’s low). Expect more consolidation below 122.50 this morning, probably with yet more cautious downside probes at 121.50.

Strategy: Attempt small shorts at 122.00, adding to 122.30; stop above 122.70. Cover half of shorts at 121.50 and the other half ahead of 121.15.