Mizuho Corporate Bank

EUR
Comment: The strongest ever monthly close and above 1.4800. Bullish momentum should increase this month and note that the Euro is not overbought. The psychological 1.5000 beckons. Note that other currencies (CHF, CZK, PLN, SGD) are leading, trading at or close to record levels against the US dollar.

Strategy: Buy at 1.4865, adding to 1.4800; stop below 1.4700. Add to longs on a sustained break above 1.4925 for 1.4965/1.5000.

EUR/JPY
Comment: Nothing significant on the monthly chart as we continue to hold within what we see is a massive topping pattern. Downside pressure increases if we now hold below 160.00 and a weekly close below 154.00 completes the formation. Patience.

Strategy: Sell at 158.15, adding to 159.50; stop above 160.00. Short term target 155.70, then 152.00.

GBP
Comment: January’s ‘hammer’ candle should set off a squeeze to 2.0000 and then 2.0600 this month, undoing the mess of December. Momentum should turn bullish if we now start holding above 1.9700 and note that futures positions are almost half what they were at last year’s peak. These will have to be rebuilt.

Strategy: Buy at 1.9900, adding to 1.9800; stop well below 1.9700. Add to longs above 1.9960 for 2.0100 short term.

JPY
Comment: Lowest monthly close since May 2005 although still above the pivotal 105.50/105.00 area. Expect more guttering around this morning, below 107.50, with a potential re-test of 105.00 late today.

Strategy: Attempt small shorts at 106.40 but be prepared to add to 107.40; stop above 107.55. Cover shorts ahead of 105.50 but be ready to re-sell on a sustained break below 104.85 for 103.45.