Mizuho Corporate Bank

EUR
Comment: The A, B, C-type correction from the all-time high at 1.3853 has dropped by a little more than we had thought and C is over 1.6 times the size of A. The Euro is more oversold than it has been in a year. We shall continue to watch for signs of basing, which may take several days, and be fairly dramatic.

Strategy: Possibly attempt tiny longs at 1.3425; stop below 1.3380. Cover around 1.3600/1.3650.

EUR/JPY
Comment: As is so often the case with the yen and yen crosses, it all comes undone terribly quickly taking no prisoners. Let’s see if the weekly Ichimoku ‘cloud’ support can stem this collapse which is seen as an A, B, C-type correction where C is a bit bigger than A. The Euro is very oversold against the yen. Wait and watch for signs of basing, probably with a massive ‘spike low’ on the weekly chart, maybe not this week but hopefully by the end of this month.

Strategy: Possibly attempt tiny longs at 155.85; stop below 155.00. Cover longs ahead of 160.00.

GBP
Comment: Needless to say that Cable is very oversold and implied volatility is up to 8.50%. Wait and watch for an interim low to form over the next week or two.

Strategy: Possibly attempt tiny longs at 1.9850; stop well below 1.9800. Cover longs at 2.0100.


JPY
Comment: Unravelling a lot faster than we had imagined. Pivotal support lies between 115.50 and 115.00. This should hold this morning but note that many financial markets are in free-fall so chart levels are much less likely to work neatly.

Strategy: Possibly attempt tiny longs at 116.00; stop below 115.45. Cover longs ahead of 118.00.