FX Technical Analysis by Mizuho Corporate Bank Mon, Nov 2 2009

[dailyforexnews]

EURUSD


Comment: Hovering around Fibonacci support as we consolidate under this year’s high, wondering which exactly is this year’s currency of choice when leveraging or de-leveraging. Allow for more of the same today and slow work all week. At-the-money implied volatility might pick up this month.

Strategy: Possibly attempt small longs at 1.4750; stop below 1.4650. Short term target 1.4855, maybe 1.4900
Direction of Trade: →
Chart Levels:
Support Resistance 1.4750 “ 1.478 1.47 1.4825 1.4681* 1.4860* 1.465 1.49 1.4625 1.4928 GBPUSD


Comment: Sterling is trapped below important resistance around 1.6665 and support from the growing Ichimoku ‘cloud’ and Fibonacci retracement. This should dominate again this week so that Cable moves less than other currencies, the pound gaining against some of these though not keeping up with the Yen which should again be one of the stronger currencies this month.
Strategy: Attempt small longs at 1.6395; stop well below 1.6200. First target 1.6600/1.6665
Direction of Trade: →
Chart Levels:
Support Resistance 1.6346 “ 1.648 1.63 1.658 1.625 1.6635/1.6665* 1.62 1.6745* 1.6100* 1.68 USDJPY


Comment: The very large Ichimoku ‘cloud’ has pushed this pair down below the 26-day average at 90.17. The US dollar is still not oversold and momentum has yet to turn bearish so plenty of further downside pressure left over for this month. Good futures volume on declining open interest suggests any are bailing out. Expect repeated cautious downside testing of a series of key support levels between 89.00 and 87.00 this month, then lower to key 85.00.
Strategy: Attempt shorts at 90.00, adding to 90.50; stop above 91.65. Short term target 89.25, then 88.50.
Direction of Trade: →
Chart Levels:
Support Resistance 89.90 “ 90.25 89.65 90.5 89.35 91 89.18* 91.30* 88.85* 91.65* EURJPY


Comment: Plunging below the Ichimoku ‘cloud’ as all Yen crosses are hit hard. This week we shall see a series of downside tests of trendline support here and in all the others too. Note that momentum has yet to turn bearish and the Euro is currently not oversold against the Yen. Implied volatility has picked up and could trade a lot higher.
Strategy: Attempt shorts at 132.80 but only if prepared to add to 134.00; stop above 136.00. Short term target 132.00, then 131.00, eventually another big slide lower still.
Direction of Trade: →
Chart Levels:
Support Resistance 132.30 “ 133.23 131.9 134 131.00* 134.75 132.8 135.25 131.00* 136 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.