FX Technical Analysis

Daily Forex Technicals | Written by Mizuho Corporate Bank | May 27 09 06:33 GMT |

EURUSD Comment: Yesterday's small 'spike low/hanging man' candle hints at a market looking for direction (here and in several major currencies too). As we move towards the pivotal 1.4200 area we feel that implied volatility should leap higher on a sustained break above 15.00%. Strategy: Buy at 1.3950, adding to 1.3800; stop well below 1.3700. Short term target 1.4000, then a lot more with a first measured target at 1.4200 then 1.4550. Direction of Trade: →↗ Chart Levels: Support Resistance 1.3932 " 1.4005 1.386 1.4051/1.4060* 1.38 1.41 1.3730* 1.4125 1.37 1.4200* GBPUSD Comment: Sneaking to a new high for the year at 1.5982 after two consecutive 'spike low/doji' candles. Cable is overbought but bullish momentum is stronger than it has been since December 2006. Strategy: Buy at 1.5950, adding to 1.5800; stop well below 1.5700. Add to longs on a sustained break above 1.6000 for 1.6100/1.6200 short term. Direction of Trade: →↗ Chart Levels: Support Resistance 1.5900 " 1.5982 1.5835 1.6000* 1.5778 1.6100* 1.57 1.6200* 1.5514* 1.64 USDJPY Comment: Hovering above fairly pivotal support roughly between 94.00 and 94.50, but below a large Ichimoku 'cloud' with moving averages suggesting a short. Implied volatility is expected to pick up over the next two weeks as prices look for direction. We continue to favour a move lower, maybe not this week but probably early in June. Strategy: Sell at 95.45, adding to 96.00; stop above 97.00. First target 94.55, then 93.55. Direction of Trade: → Chart Levels: Support Resistance 94.93 " 95.51 94.55 95.65 94.25 96 93.85 96.22 93.55* 96.71* EURJPY Comment: Consolidating above a very large Ichimoku 'cloud' in what we now see as a large 'triangle'. We now favour a slow sideways move over the next week or two, here and in a whole range of other Yen crosses. Strategy: Possibly attempt small shorts at 133.00; stop above 133.75. Add to shorts on a sustained break below 130.90 for 129.50 short term. Direction of Trade: → Chart Levels: Support Resistance 132.05 " 133 131.47 133.45/133.60* 130.95 134 130.2 134.33 129.50* 134.80* 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.