Mizuho Corporate Bank

EUR
Comment: Another very strong weekly close and a new record high (1.3846). The Euro is still overbought and bullish momentum has eased. Immediate upside pressure is maintained while above 1.3700 and we favour another push higher today with some fairly desperate moves if the Dollar Index breaks and holds below 80.00.

Strategy: Attempt small longs at 1.3835 adding to 1.3780; stop below 1.3700. Target record high 1.3846, then 1.3875 and then 1.4000.

EUR/JPY
Comment: Tiny signs of instability here and in a number of other Yen crosses that are looking a little ‘heavy’. As with dollar/Yen, extraordinary price action today with a squeeze to a new record at 169.05 and then a collapse to 167.14. A break below 167.00 will probably turn momentum bearish and set off a sudden slide to 166.00, possibly 165.00.

Strategy: Attempt shorts on a bounce to 168.00, adding to 168.70; stop above 169.15. Add to shorts below 167.00 for levels as above.

GBP
Comment: Strongest weekly close in I don’t know how long underlines the fact that many are only just waking up to chronic US dollar weakness. Expect another upside squeeze today, albeit a cautious one, to 2.0700.

Strategy: Possibly attempt longs at 2.0600 for 2.0700/2.0750; stop below 2.0500.

JPY
Comment: Extraordinary price action at the Tokyo opening with a massive short squeeze up to a high at 122.22 at which point it was comprehensively slapped down. This adds weight to resistance between here and 122.2 that capped all last week. A break below 120.70 if not this morning then some time this week should see prices drop quickly to 120.00/119.50.

Strategy: Attempt shorts at 121.00 adding to 121.70; stop above 122.25. Cover half of shorts at 120.80 and the other half ahead of 120.00.