Mizuho Corporate Bank

EUR
Comment: Dipping to another recent low at 1.4046 today and one-month at-the-money implied volatility soars to 13.00%. The Euro is still terribly oversold and stock markets still look very shaky.
Strategy: Possibly attempt tiny longs at 1.4080; stop below 1.4000. Short term target 1.4200, then 1.4425.

EUR/JPY
Comment: Re-testing pivotal support and Friday’s low at 150.60 even more quickly than we had thought. Note that CHF/JPY is currently trading below that equivalent level. If not today then some time this month this cross should trade an awful lot lower. This cross is more oversold than anything since January 1999, but then bearish momentum is at a record. Expect much thrashing around today and remember that when we break below 150.00 moves of 7 Yen per week can be expected.
Strategy: Sell at 151.50, adding to 153.50; stop above 157.05. Short term target 150.60, then 150.00, then 149.25 and then we really get going.

GBP
Comment: Yesterday’s attempt at a rally was capped by first Fibonacci retracement and the 10-day moving average, and Cable dipped to another recent low at 1.7471. Once again expect it to try and base today and it is more oversold than anything since 1982. No wonder one-month at-the-money implied volatility has exploded to 12.88%, higher than anything since 1998. Be very careful.
Strategy: Attempt small longs at 1.7550; stop below 1.7400. Short term target 1.8000, then 1.8300.

JPY
Comment: The Yen continues to gain against all major currencies as the ‘carry trade’ unwinds. We are re-testing the Ichimoku ‘cloud’ which while thin at the moment, broadens significantly by mid-month. Prices should try and cling above 107.00 this morning, yet all rallies are seen as selling opportunities for an eventual move lower later this month.
Strategy: Sell on a bounce to 108.00, adding to 108.50; stop above 109.25. Short term target 107.25/107.00, then 105.75/105.50.