FX Technical Analysis

Daily Forex Technicals | Written by Mizuho Corporate Bank | Sep 01 08 06:40 GMT |

EURUSD Comment: Just holding above the recent low at 1.4570 after the biggest monthly price drop ever. Nevertheless we remain within normal retracement parameters and the long term trend to a weaker US dollar. Bearish momentum has almost vanished completely and the Euro is very oversold. We continue to watch warily for signs of basing this week. Strategy: Possibly attempt tiny longs at 1.4635; stop below 1.4570. Short term target 1.4800, then 1.4900. Direction of Trade: → Chart Levels: Support Resistance 1.4617 " 1.4703 1.46 1.4729 1.4570* 1.4768 1.4525 1.4812 1.448 1.4909* GBPUSD Comment: The biggest monthly collapse since 1992 and losing ground against all major currencies the only exception the South Korean won which has also been hammered. Cable is more oversold than it has been since September 2000 and on the Bank of England's Trade Weighted basis weaker than it has been since November 1996. This is obviously unsustainable but with 'helpful' comments from UK authorities who only knows when enough is seen to be enough. Stand aside if possible and don't believe everything you hear. Strategy: Possibly attempt the tiniest of longs at 1.8045; stop below 1.7985. Short term target 1.8200, then 1.8400. Direction of Trade: → Chart Levels: Support Resistance 1.8005 " 1.8075 1.793 1.813 1.78 1.82 1.775 1.83 1.76 1.84 USDJPY Comment: The 'evening star' candle on the monthly charts adds weight to our view that the move above 110.00 was an 'extension'. The weekly close at 108.25, the lowest of the month, was slightly short of what we had hoped but a daily one this week should complete a small 'head-and-shoulders' top. Strategy: Sell at 108.5 0, adding to 109.00; stop above 109.35. Short term target 108.25/108.00, then 107.25. Direction of Trade: → Chart Levels: Support Resistance 108.21 " 108.7 108.13/108.00* 109.1 107.85 109.72 107.65 110.29 107.25* 110.67* EURJPY Comment: Having given up 61% of the previous rally it is just clinging to the weekly Ichimoku 'cloud'. The monthly close below 160.60 should add to current strong bearish momentum although the Euro is very oversold against the Yen (and other Yen crosses are similar, the KRW/JPY and NZD/JPY almost at March's lows). For today expect cautious consolidation above 158.00 with rallies to 160.00 seen as selling opportunities for further big declines this month. Strategy: Sell at 158.85, adding to 160.00; stop above 162.15. Short term target 157.25, then 156.00. Direction of Trade: → Chart Levels: Support Resistance 158.42 " 159 158.25 159.62 157.25 160 155.95* 161 155.55 162.03* 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.