Mizuho Corporate Bank

EUR
Comment: Yesterday’s sell-off from the record high at 1.3853 suggests we will hold below here until month-end, maybe longer. This should provide a much-needed period of consolidation and correction under fairly key levels in many currencies versus the US dollar. as several other currencies gain against the US dollar. The Euro is no longer overbought and bullish momentum has eased.

Strategy: Possibly attempt small longs at 1.3725; stop below 1.3695 and wait for signs of basing. Target 1.3750/1.3775.

EUR/JPY
Comment: Breaking below trendline support having given up over 50% of the rally from early June to July. We shall continue with a very cautious stance and be prepared to turn positions as necessary as we move into consolidation and possibly a deeper correction mode.

Strategy: Possibly attempt tiny longs at 165.00; stop/reverse below 164.70 for 164.00 then 162.00. Cover longs at 166.00 and sell between here and 167.00; stop above 169.05.

GBP
Comment: Consolidating under 2.0656 and likely to hold below here at least until month-end. The question now is how deep will pullbacks be. Today we are likely to try and hold above the nine-day moving average at 2.0489 and trendline support at 2.0400.

Strategy: Possibly attempt small longs at 2.0490; stop below 2.0400. Target 2.0550.

JPY
Comment: Consolidating above 120.00 and likely to hold above here again today. The US dollar is still oversold and momentum is bearish. Rallies to 120.70/121.00 are seen as selling opportunities for a subsequent drop to weekly trendline support at 119.20 around month-end.

Strategy: Attempt small shorts at 120.70/121.00; stop above 122.25. Cover half of shorts at 120.00 and the other half ahead of 119.00.