Mizuho Corporate Bank

EUR
Comment: A tiny daily range and still consolidating in the middle of the large ‘triangle’ pattern as some wonder why the Euro has not strengthened because of the widening interest rate differential to the US dollar. Expect more random moves roughly between 1.4600 and 1.4800 with a sustained break above 1.4800 targeting trendline resistance at 1.4910.

Strategy: Attempt small longs at 1.4775, adding to 1.4700; stop below 1.4585. Add to longs on a sustained break above 1.4800 for 1.4850 and then 1.4900.

EUR/JPY
Comment: Consolidating between the nine and twenty-six day moving averages and should hold around here again today. Downside pressure increases if we now hold below 160.00.

Strategy: Strategy remains unchanged: sell at 157.75, adding to 158.50; stop above 160.00. Short term target 155.70, then 152.00.

GBP
Comment: Slow work but at least it’s trying. Upside pressure increases if we can hold above the nine-day average at 1.9720 again today. We expect a squeeze to 2.0000 and then 2.0600 next month.

Strategy: Buy on a dip to 1.9850, adding to 1.9750; stop below 1.9450. Add to longs above 1.9900 for 2.0100 short term.

JPY
Comment: Nothing doing until this evening. We continue to favour yet more consolidation above pivotal support between 105.50 and 105.00. Same idea for equity indices and Yen crosses.

Strategy: Strategy remains unchanged: attempt small shorts on a bounce to 107.00, adding to 107.50; stop above 108.15. Cover shorts ahead of 105.50 but be ready to re-sell on a sustained break below 104.85 for 103.45.

GBP/JPY
Comment: Leading the way lower after completing a very major, large ‘head-and-shoulders’ top in 2007. The first measured target at 205.00 has already been met and we feel this cross should consolidate above here for a few weeks (allowing other Yen pairs to catch up). Rallies to 220.00, and probably no higher than 224.00, are seen as excellent selling opportunities for a subsequent break even lower later this year. Expect some dithering at the psychological 200.00 level, then down to 190.00 and maybe 180.00 if enough momentum builds.

A weekly close above 224.00 would force us to review.