Mizuho Corporate Bank

EUR
Comment: Decent resistance at 1.4750 has capped the Euro but the question is for how long. Further out we continue to expect generalised and rather frightening US dollar weakness.

Strategy: Buy at 1.4720 but be prepared to add to 1.4600; stop below 1.4550. Add to longs above 1.4755 for 1.4900 short term.

EUR/JPY
Comment: Looking increasingly top-heavy, here and in a whole raft of other Yen crosses. Weekly closes below trendline support should tip the balance. Sooner rather than later we favour a serious move lower.

Strategy: Sell at 161.50, adding to 162.50; stop above 164.15. Add to shorts below 160.47 for 159.00.

GBP
Comment: The pound took another pounding yesterday and Cable is clinging precariously above 1.9700. We continue to watch for signs of forming an interim base.

Strategy: Possibly attempt small longs at 1.9820; stop below 1.9740. Add to longs above 2.0105 for 2.0300 short term.

JPY
Comment: First day of trading in 2008, and Japan still on holiday, yet we can clearly see where the line of least resistance lies. We remind that thin markets can mean extreme moves. Watch the ‘carry trade’ unwind, keeping a close eye of the Swiss franc too. Momentum is negative and the US dollar is slightly oversold, but does anyone really care. Watch Yen crosses as these may drag this pair lower too.

Strategy: Sell at 109.65 but be prepared to add to 110.50; stop above 111.30. Add to shorts on a sustained break below 109.00 for 108.25 short term, maybe November’s low at 107.22.