Mizuho Corporate Bank

EUR
Comment: Trading just under a record high (1.3846) as other currencies gain against the US dollar. 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 1.3825 adding to 1.3780; stop below 1.3700. Target record high 1.3846, then 1.3875 and then 1.4000.

EUR/JPY
Comment: A large ‘shooting star’ candle yesterday adds weight to our view that here and a number of other Yen crosses that are looking a little ‘heavy’. The break below 167.00 has turned momentum bearish and we continue to feel it will set off a sudden slide to 166.00, possibly 165.00.

Strategy: Attempt shorts on a bounce to 167.00, adding to 167.70; stop above 169.15. Add to shorts below 166.40 for levels as above.

GBP
Comment: Rocketing higher as many wake up to what has been happening for years. Needless to say it is terribly overbought but who cares when you are scrambling to keep up. Expect another upside squeeze today, albeit a cautious one, to 2.0700.

Strategy: Possibly attempt small longs on a dip to 2.0600; stop below 2.0450. Target for 2.0700/2.0750.

JPY
Comment: Moving down slightly faster than we had expected and the US dollar is almost oversold. While momentum is bearish, it is probably not strong enough to push prices below this morning’s low at 120.41. Therefore we favour consolidation above here today with rallies to 121.00/121.50 seen as selling opportunities for a subsequent drop to 120.00/119.50.

Strategy: Attempt shorts on a bounce to 120.90 adding to 121.50; stop above 122.25. Cover half of shorts at 120.50 and the other half at 120.00.