Mizuho Corporate Bank

EUR
Comment: Tiny signs of instability below the all-time high at 1.3834, but giving up very little room to the downside. The Euro is still overbought and bullish momentum has eased. Immediate upside pressure is maintained while above 1.3700.

Strategy: Attempt small longs at 1.3780/1.3760; stop below 1.3670. Target record high 1.3834, then 1.3875 and then 1.4000.

EUR/JPY
Comment: Some other Yen crosses have posted new recent highs yesterday and/or today. This one is consolidating neatly in a ‘triangle’ under the all-time high at 168.95 and above the 9-day moving average at 167.73. 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: Attempt small longs at 168.50, adding to 168.00; stop well below 167.50. Cover ahead of 168.95 but look to re-buy on a sustained break above 169.15 for 170.00/170.50.

GBP
Comment: Still overbought as we consolidate under 2.0550, yet giving up very little room to the downside. Expect more of the same today and we shall continue to allow for a dip below Wednesday’s low at 2.0460 for a drop to 2.0400. After the spectacular rally of the last four weeks we are currently a lot more cautious short and medium term.

Strategy: Strategy remains unchanged: 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: Nothing to add as we hold in a small band above the top of the Ichimoku ‘cloud’ (121.89 today). 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 122.20/122.30; stop above 122.70. Cover half of shorts at 121.75 and the other half ahead of 121.15.