Mizuho Corporate Bank

EUR
Comment: We shall be watching to see if the Euro can hold at the 38% retracement level. It might, it might not, but the important thing to note is that we have moved into a period of correction and consolidation that will take a few weeks.

Strategy: Possibly attempt small longs at 1.3630; stop below 1.3600 and wait for signs of basing. Target 1.3750/1.3775.

EUR/JPY
Comment: Price action similar to March’s drop yet it is still very much in corrective mode. We are watching for tentative signs of basing between 162.00 and 160.00. 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 161.50, adding to 161.00; stop below 160.00. Cover longs at 164.00.

GBP
Comment: Pulling back a lot more quickly than we had imagined and should start trying to base between 2.0200 and 2.0100.

Strategy: Possibly attempt small longs at 2.0200; stop well below 2.0100. Target 2.0500.

JPY
Comment: Trying to cling to weekly trendline support and the Ichimoku ‘cloud’. Needless to say the US dollar is oversold after the biggest weekly and monthly sell-off in months. Over the last month futures positions have been steadily cut and excellent volume Thursday suggests some are panicking. For today expect more consolidation between 118.00 and 119.50, where short squeezes to 120.50/121.00 (and no higher than 122.22) are seen as selling opportunities.

Strategy: Attempt small shorts on a bounce to 119.00 but be prepared to add to 120.50; stop above 122.25. Cover half of shorts at 118.10 and the other half ahead of 116.50.