Mizuho Corporate Bank

EUR
Comment: Close to record high at 1.4968 and some Eastern European currencies are doing even better. Nevertheless US authorities remain committed to a strong US dollar policy while their financial institutions are hoping to sell off huge chunks of themselves to Sovereign Wealth funds. The Euro is not especially overbought and bullish momentum is strong. If we can hold above 1.4850 today and upside push is unstoppable.

Strategy: Attempt longs at 1.4850, adding to 1.4800; stop below 1.4760. Add to longs on a daily close above 1.4900 for 1.4965/1.5000 short term.

EUR/JPY
Comment: Surprising how Yen crosses are moving so much more slowly than we had imagined. Euro/Yen appears to be trapped inside a very large weekly Ichimoku ‘cloud’, with a ‘spike high’ last week at the top of it. Hopefully this might add a little much-needed downside pressure for a break below to 26-day average at 159.15.

Strategy: Strategy remains unchanged: sell at 161.00, adding to 162.00; stop above 162.30. Add to shorts below 160.00 for 159.00 short term and then 158.00, then a lot more.

GBP
Comment: Miraculously clinging to support from the Ichimoku ‘cloud’ and Fibonacci retracement. The pattern since May last year is very scary and may well turn out to be very misleading, especially as no other currencies against the US dollar have anything remotely similar. Be very careful and sceptical. Very oversold and we continue to warn of the chance of a ‘false break’ lower followed by a sharp short squeeze as many fret about the 1.9600 level.

Strategy: Attempt longs at 1.9610; stop below 1.9470. Add to longs above 1.9700 and again above 1.9830 for 1.9900/2.0000 short term.

JPY
Comment: Last week’s small ‘spike high’ hints at a concerted downside test this week. Price action of the last two weeks might be an inverted ‘flag’, in which case the next step would be a very large drop.

Strategy: Attempt shorts at 108.50 but be prepared to add to 109.50; stop above 110.15. Add to shorts on a sustained break below 108.25 for 107.25 and eventually 105.50.