Mizuho Corporate Bank

EUR
Comment: Very difficult with sudden sharp intra-day moves as we probe support between 1.5400 and 1.5360. We continue moving sideways just under the thin Ichimoku ‘cloud’. The Euro is not oversold and bullish momentum has collapsed. We feel that a small break lower is likely and our downside target will probably be 1.5100 some time this month, but a cautious approach is warranted, because we continue in a medium term process of correction and consolidation.
Strategy: Attempt tiny shorts at 1.5440, adding to 1.5560; stop above 1.5600. Short term target 1.5400/1.5360, then May’s low 1.5285.

EUR/JPY
Comment: Little to add since yesterday: trading at some of the highest ever levels and no signs of topping yet. If anything price action over the last five days is a small ‘pennant’ hinting at another serious upside test. We are very unsure as to our current outlook and therefore suggest one does as little as possible again today and we continue to watch for topping activity.
Strategy: Possibly attempt tiny shorts at 166.45; stop above 167.25. Short term target 165.65, then 165.00.

GBP
Comment: Very nasty and difficult as we continue to thrash around the lower levels of the last three months. Very good volumes in futures contracts are therefore a surprise. Expect more of the same today including a ‘spike’ below 1.9400 some time(s) this month.
Strategy: Possibly attempt tiny longs at 1.9470; stop below 1.9350. Short term target 1.9625.

JPY
Comment: A big rally this week and testing the 200-day moving average at 108.03. The US dollar is not overbought, momentum is steadily bullish, and at-the-money implied volatility is at the average of the last decade. Chart patterns are totally inconclusive and chart levels poor. Note that futures positions, approaching delivery, are close to their lowest in three years.
Strategy: Do as little as possible. For those who have to: possibly attempt tiny shorts at 107.25, adding to 107.50; stop above 107.90. Short term target 106.50, then 106.00.