Mizuho Corporate Bank

EUR
Comment: A small ‘spike low’ against trendline and Fibonacci retracement; note also that the Euro held above here in Q4 2007 and Q1 2008. Let’s see if it can build on Fridays tiny rally, keeping in mind that it is still terribly oversold.

Strategy: Possibly attempt tiny longs at 1.4350; stop below 1.4175. Short term target 1.4430, then 1.4540.

EUR/JPY
Comment: The more you stretch the elastic band, the sharper the snap back. We did not get our close below 154.00 Friday, therefore we should hold above 150.00 this week and maybe next. This does not alter the fact that we are forming a massive long tern topping formation, therefore all rallies are seen as selling opportunities for am serious move lower later this year.

Strategy: Sell at 155.80, adding to 158.40; stop above 159.35. Short term target 154.000, then 153.00.

GBP
Comment: A tiny ‘gap’ this morning as we bounce from terribly oversold levels. Will we be able to build on this today and this week? Yes, probably but slowly.

Strategy: Possibly attempt tiny longs at 1.7850; stop below 1.7500. Short term target 1.8000, maybe 1.8300.

JPY
Comment: A massive bounce from the bottom of the Ichimoku ‘cloud’ and the US dollar is not in the least bit oversold any more. This massive move suggests prices will consolidate between 107.00 and 110.00 this week and maybe next, yet also suggests instability at current levels and it will eventually break lower. There is a gap between 107.74 and 108.01 at the Tokyo opening this morning, suggesting the first move will be lower to fill it.

Strategy: Sell at 108.50; stop well above 109.25. Short term target 107.75, then 107.00.