FX Technical Analysis
EURUSD
Comment: Back in the middle of the 'triangle' formation as we remain within the range established late October. Allow for more random moves within here this week noting that the closer we get to the apex the more likely we are to get 'false breaks' from this pattern. There is a good chance that we might break to new recent lows as the unwinding of the 'carry trade' continues.
Strategy: Possibly attempt small longs at 1.2600; stop below 1.2500. Cover longs ahead of 1.2800
Direction of Trade: →
Chart Levels:
| Support |
Resistance |
| 1.2580 " |
1.272 |
| 1.25 |
1.281 |
| 1.2423* |
1.293 |
| 1.2388 |
1.297 |
| 1.2329* |
1.3081* |
GBPUSD
Comment: Dropping sharply from trendline resistance and the top of the downward-sloping wedge formation. Expect a cautious downside test of this year's low at 1.4560.
Strategy: Possibly attempt longs at 1.4885; stop below 1.4700. First target 1.5000, maybe 1.5200.
Direction of Trade: →
Chart Levels:
| Support |
Resistance |
| 1.4807 " |
1.495 |
| 1.47 |
1.5 |
| 1.4645 |
1.51 |
| 1.4560* |
1.525 |
| 1.4500* |
1.54 |
USDJPY
Comment: Almost the lowest daily close this year, in turn the lowest since August 1995. It is just a question of time before we re-test October's low at 90.87. Bearish momentum is still very strong and the US dollar is not oversold. One-month at-the-money implied volatility should start edging higher, from 20.00% to 30.00%.
Strategy: Sell at 93.20 but only if prepared to add to 94.00; stop well above 94.75. First target 92.50, then 91.50 and maybe 91.00.
Direction of Trade: →↘
Chart Levels:
| Support |
Resistance |
| 93.00 " |
93.83 |
| 92.87* |
94.25 |
| 92.48 |
94.60* |
| 92 |
95.75 |
| 91.88 91.50* 90.87** |
96 |
EURJPY
Comment: Testing the bottom of the 'triangle' formation, which can also be seen as an inverted 'pennant', suggesting another drop is imminent. The question is whether we will see another massive rush lower, or whether we shall have to live through a series of cautious steps down over a longer period of time. We had favoured the latter but the close we get to the end of the month, bearish momentum might build considerably.
Strategy: Attempt small shorts at 117.40; stop well above 120.00. First target 116.50. Re-sell in earnest on a break below 116.40 for 114.00.
Direction of Trade: →↘
Chart Levels:
| Support |
Resistance |
| 117.23* " |
118.53 |
| 116.45* |
119.1 |
| 115 |
120 |
| 114.45 |
121 |
| 113.62** |
121.75 |
Mizuho Corporate Bank
Disclaimer
The information contained in this paper is based on or derived from information generally available to the public from sources believed to be reliable. No representation or warranty is made or implied that it is accurate or complete. Any opinions expressed in this paper are subject to change without notice. This paper has been prepared solely for information purposes and if so decided, for private circulation and does not constitute any solicitation to buy or sell any instrument, or to engage in any trading strategy.
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