Mizuho Corporate Bank

EUR
Comment: Shock, horror as we trade below the lower edge of the range since March. This is seen as a much-needed clear-out which should eventually turn into some sort of ‘spike low’. The Euro is more oversold than it has been since December 2005 after four consecutive weekly declines. For this morning expect prices to try and base around the 1.5200 area, then wait and watch for a reversal pattern if not today then over the coming week.
Strategy: Possibly attempt small longs at 1.5235; stop below 1.5175. Add to longs on a sustained break above 1.5315 for 1.5350 short term and then 1.5400.

EUR/JPY
Comment: Still working within a potential ‘broadening top’ and drifting to the top of a very large Ichimoku ‘cloud’. Expect cautious consolidation above here this morning, maybe all day, but as and when this level gives way expect a very sharp slide to the bottom of the ‘cloud’ around 164.00.
Strategy: Attempt small shorts at 167.00 but only if prepared to add to 168.50; stop above 170.15. Short term target 166.55, then 164.00.

GBP
Comment: Dipping to its lowest level this year. It is more oversold against the dollar than it has been in three years. We are not in uncharted territory! This latest collapse should end suddenly and probably dramatically.
Strategy: Possibly attempt tiny longs at 1.9300; stop below 1.9250. Short term target 1.9500.

JPY
Comment: This week’s US dollar buying is seen as a final feeding frenzy in the corrective move that started in March. The Yen has stalled against the 110.00 level, as well as psychological and pivotal, it is a 50% retracement from last year’s high and coincides with the weekly Ichimoku ‘cloud’. The US dollar is more overbought than it has been in over a year. Watch for a reversal pattern on the weekly chart either this week or next.
Strategy: Possibly attempt tiny shorts at 109.60; stop above 110.15. Short term target 108.60, maybe 108.25.