EUR: Attempt longs at 1.4765, adding to 1.4665; stop below 1.4600

by Nicole Elliott

Mizuho Corporate Bank

EUR
Comment: A small ‘bullish engulfing’ candle yesterday here and something similar in a series of other currencies adds weight to our view that the Euro is trying to form a slow interim base against retracement support. For today we ought to hold above 1.4685, probably with a cautious upside probe to 1.4800/1.4850.
Strategy: Attempt longs at 1.4765, adding to 1.4665; stop below 1.4600. Short term target 1.4800 and then 1.5000.

EUR/JPY
Comment: Retracing half of the previous big rally, holding clearly under the ‘broadening top’, and likely to move sideways today. Late this week or late this month we expect a drop to 158.00, and further out a slide to 152.00. Below here and the long term picture gets seriously interesting.
Strategy: Sell at 162.25, adding to 163.65; stop above 164.00. Short term target 161.00/160.60, then 158.00.

GBP
Comment: Small signs that Cable is finding its feet with the first up-day after twelve consecutive down-days. The verdict? Could do better. Over the next fortnight we expect a messy attempt at basing followed by a bounce to 1.9000.
Strategy: Attempt longs at 1.8635; stop below 1.8500. Short term target 1.8700, then 1.8800.

JPY
Comment: Slightly unsteady as we work in a sort of upward-sloping ‘wedge’ formation. We are still looking for signs of topping at the 110.00/110.50 pivotal chart area. A daily close below 109.25 might add a little bearish pressure.
Strategy: Attempt shorts at 109.75, adding to 110.35; stop above 110.75. Short term target 109.55 then 108.55.