FX Technical Analysis

Daily Forex Technicals | Written by Mizuho Corporate Bank | Nov 11 08 07:23 GMT |

EURUSD Comment: Little to add as we consolidate in a small 'triangle' and at-the-money implied volatility dips to a still relatively expensive 21.00%. Obviously we cannot hold inside the formation for much longer but be careful as a 'false break' is very possible. Strategy: Attempt longs at 1.2700; stop below 1.2495. First target 1.2900, then 1.3100 Direction of Trade: → Chart Levels: Support Resistance 1.2700 " 1.2927 1.2675/1.2653 1.3 1.2527* 1.3117* 1.2445 1.32 1.2329** 1.3300* GBPUSD Comment: Dull and disappointing and we shall probably have to put with more of the same this week. Beware drawing trendlines too tightly and note that at-the-money one-month implied volatility remains very high at 23.00%. Strategy: Attempt longs at 1.5625; stop below 1.5400. First target 1.6000 then 1.6400 Direction of Trade: → Chart Levels: Support Resistance 1.5557 " 1.58 1.5535 1.5885 1.5400* 1.605 1.53 1.62 1.5278/1.5260** 1.64 USDJPY Comment: Same old story as we continue to consolidate in a small range. Expect more of the same today noting that the 'Lagging' line at 97.97 is approaching candle resistance for the next fortnight between 99.00 and 102.00. Note that despite decent volume open interest in the futures contract is less than half last year's peak. Strategy: Attempt small shorts at 97.95, adding to 99.00; stop well above 100.00. First target 97.00, then 96.00 below which should probably trigger a sudden collapse to 92.00. Direction of Trade: → Chart Levels: Support Resistance 97.48 " 98.31 97 99.47 96.75 99.92 96.35 100.56* 96.08* 101.6 EURJPY Comment: Consolidating surprisingly neatly under the 38% retracement resistance level of the final leg lower. Therefore we feel there is still a small chance of a squeeze above the recent high at 131.00, at which time at-the-money implied volatility should increase. Strategy: Possibly attempt small shorts at 124.50 but only if prepared to add to 128.50; stop above 131.25. Cover shorts ahead of 122.00 Direction of Trade: → Chart Levels: Support Resistance 123.80 " 125.5 123.43 126.95 122.7 128.5 122.00* 130.00* 121.4 131.05* 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.