FX Technical Analysis

Daily Forex Technicals | Written by Mizuho Corporate Bank | Oct 08 09 06:50 GMT |

EURUSD Comment: Limping along behind the leaders as the US dollar weakens against a raft of major currencies. Momentum is zero and the Euro is certainly not overbought. Allow for hesitation at the 1.4750 area this morning, and mainly all day. Until the Euro manages a daily (and preferably weekly) close above 1.4800 we cannot rule out another test of support between 1.4600 and 1.4500. Strategy: Possibly attempt the tiniest of shorts at 1.4755; stop/reverse above 1.4845. Cover between 1.4650 and 1.4600 and watch for signs of basing before going long Direction of Trade: →↗ Chart Levels: Support Resistance 1.4683 " 1.4763 1.465 1.4774 1.4593 1.4803 1.4565 1.4845** 1.4500/1.4480* 1.49 GBPUSD Comment: Consolidating nervously inside a tiny 'triangle' another downside probe of medium term Fibonacci retracement support looks likely. Strategy: Possibly attempt tiny longs at 1.5900/1.5875; stop well below 1.5700. Short term target 1.6050. Direction of Trade: → Chart Levels: Support Resistance 1.5858 " 1.6013 1.5805 1.605 1.5770* 1.6127 1.5700* 1.615 1.56 1.6200* USDJPY Comment: Despite yesterday's strong intra-day rally, which was stopped by the 9-day moving average, the dollar is back down to where it was this time yesterday. The US dollar is oversold and bearish momentum has increased; add to this the threat of verbal intervention and the mix becomes increasingly volatile. A test of this year's low at 87.10, and then critical long term support at 85.00, is imminent. Strategy: Attempt shorts at 88.25 but only if prepared to add to 89.40; stop above 90.05. Short term target 88.25, eventually 87.25 Direction of Trade: →↘ Chart Levels: Support Resistance 88.16 " 88.72 88.01/87.97* 89.4 87.5 90.00* 87.10/87.00** 90.42 86.80/86.65* 86.00 90.85 EURJPY Comment: Yen crosses are very mixed with some hovering close to this year's highs and other currencies trading at some of this year's lower levels. EUR/JPY is still hovering rather precariously on trendline support with the Euro oversold again and bearish momentum increasing slightly. Any minute now this yen cross should drop, maybe like a stone. Strategy: Attempt small shorts at 130.25, adding to 131.00; stop above 132.25. Short term target 129.65 then 129.00. Direction of Trade: →↘ Chart Levels: Support Resistance 129.98 " 130.5 129.84 131.1 129.58 131.66 129.00* 132.04* 128 133 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.