Mizuho Corporate Bank

EUR
Comment: Yet another new record high at 1.4731, the Euro is somewhat overbought, zero resistance levels and all too many who are late to the party, yet the Euro refuses to lie down. It remains well bid at these record highs and would benefit from a bout of consolidation. If not today then shortly watch for signs of reaching an interim high.

Strategy: Possibly attempt tiny longs on a dip to 1.4625; stop below 1.4600. Target 1.4750, maybe 1.4950.

EUR/JPY
Comment: Dipping to the 26-day moving average at 164.10, quite good support, and a pity that yesterday’s close was not below 165.00. We expect downside pressure to increase over the coming days despite a very fat ‘cloud’ under current levels. As is so often the case with Yen crosses, when bearish momentum build declines can be impressive and swift.

Strategy: Sell at 165.20, adding to 165.70; stop above 167.00. Cover ahead of 164.00 but be ready to re-sell on a sustained break below 163.70 for 161.70.

GBP
Comment: Setting another multi-year high at 2.1072 and may hold below 2.1100 today. Thin markets, historically high levels, and a pound that is worth over two dollars means one has to allow for very big intra-day moves.

Strategy: Possibly attempt tiny longs at 2.1025; stop below 2.0900. Short term target 2.1100.

JPY
Comment: Prices will probably try and hold above August’s low of 111.60 until the end of this week. However, as is so often the case with the Yen and Yen crosses, moves lower can be very dramatic and huge. Later this week we favour some sudden Yen appreciation. For this morning expect prices to cling at the 112.50 area, possibly squeezing up to 113.50 and no higher than 114.00. Then down again.

Strategy: Sell on a bounce to 113.00, adding to 113.50; stop well above 114.10. Short term target 112.00 then a lot lower.