Mizuho Corporate Bank

EUR
Comment: All very exciting as we set a new record high at 1.4320 but note that Eastern European currencies are doing even better, the Czech koruna at its strongest ever against the Euro. Futures positions still need re-building and the Euro is surprisingly not overbought. Dips towards 1.4200 are seen as medium term buying opportunities for an eventual rally to higher highs.

Strategy: Possibly attempt small longs on a dip to 1.4280 but be prepared to add to 1.4200; stop below 1.4130. Target 1.4400 then 1.4550.

EUR/JPY
Comment: Drifting towards 164.00, as expected, with a sustained break below here likely to set off a sharp drop. Short term target 162.00, then 154.00.

Strategy: Sell at 164.50, adding to 165.50; stop above 166.50. Cover ahead of 164.00 but re-sell on a sustained break below 163.60 and again below 163.60 for 161.00.

GBP
Comment: Shame Cable could not manage a close above the top of the trendline. Hopefully it will do so today, where a weekly close above 2.0500 should add considerable bullish momentum. For this morning we expect prices to stabilise above 2.0400 and hopefully hold consistently above 2.0500 later today.

Strategy: Attempt longs at 2.0450 but be prepared to add to 2.0350; stop below 2.0245. Add to longs on a sustained break above 2.0515 for the July high at 2.0656.

JPY
Comment: The US dollar slipped suddenly to the bottom of the ‘cloud’, as expected, and should try and hold above here this morning. While unlikely today a weekly close below the pivotal level at 114.00 could set off a massive collapse later next month.

Strategy: Sell on a bounce to 115.50, adding to 116.00; stop above 117.00. Short term target 114.50/114.00.