Mizuho Corporate Bank

EUR
Comment: Consolidating surprisingly neatly just below the record high at 1.4530 as futures positions are being rebuilt. The Euro is not nearly as overbought as some might think and dips towards 1.4200 are seen as medium term buying opportunities.

Strategy: Attempt tiny longs at 1.4500 but be prepared to add to 1.4400; stop below 1.4320. Target 1.4530/1.4550.

EUR/JPY
Comment: Still very inconclusive as we hover nervously either side of 165.00. We continue to favour signs of topping but warn that we may have to change our view at a moment’s notice. For this week a break below 164.00 targets 161.50. At-the-money implied volatility looks set to trade higher.

Strategy: Attempt shorts at 166.25; stop above 167.35. Cover ahead of 165.00 but re-sell on a sustained break below 164.85 for 164.00 then 163.00.

GBP
Comment: Consolidating terribly neatly in a small ‘triangle/pennant’ at these multi-year highs. Later this month/year-end we continue to allow for a squeeze up to 2.1100. Remember Thanksgiving this month marks the beginning of the holiday season so thin markets might mean overreaction and big price moves.

Strategy: Possibly attempt longs on a dip to 2.0800/2.0775; stop below 2.0635. Short term target 2.0885 and 2.1000/2.1100 medium term.

JPY
Comment: Quiet as we consolidate at the same sort of levels of the last two weeks, just under the Ichimoku ‘cloud’. The US dollar is not oversold and momentum is steadily bearish. Open interest is still almost half what it was at this summer’s record. For this week we favour a series of cautious downside tests.

Strategy: Sell at 114.65, adding to 115.00; stop above 115.55. Short term target 114.00/113.80 maybe 113.25.