EUR/USD
Our EUR/USD Sell Rally level last week was virtually the top of the 5 days of trading. More importantly, the failure, and renewal of selling interest, emphasised the importance of the 13 day moving average. The result was a third down week in a row and a decline that has now corrected more than half of this year’s rise.
Sentiment is now oversold and stalling at the daily Ichimoku Cloud but with the Keltner channel angling lower and the 13 day line capping rallies we continue to look to the downside. So our call is Bearish but to leave room to Sell a Rally to 1.3767, Thursday’s open. The risk is 1.3820 with targets of 1.3664, a broader 62% pullback, then 1.3593 and 1.3562.
The risk is that selling pressure is weaker than currently assessed – signalled above 1.3820, last week's top, to 1.3876.
EUR/GBP
Last week’s EUR/GBP sell rally strategy was virtually the high of the week as initial profit taking developed. However, this topside stalled at the Marabuzo line mentioned the top of the Ichimoku Cloud and the 13/100 day moving averages.
Although the subsequent renewal of selling interest was only deep enough to leave price virtually unchanged over the 5 days, it was enough to leave signals for sentiment as negative. Further volatility is likely in this cross but our call is Bearish while leaving room to Sell a Rally to 0.8315, last week's top.
The risk is 0.8361 with an immediate target of 0.8215, a 76% correction, then 0.8187 and 0.8160, 62% of the 2012-13 rise.
GBP/JPY
Improving sentiment from the 100 day average rate left last week’s signals for GBP/JPY pointing higher. These were confirmed with a 2nd higher weekly low and high in a row and initial gains of just over 2 Big Figs.
However, sellers returned to the market on Thursday from close to this year’s 5 ½ year highs with sentiment deteriorating to close unchanged on the week, overall. The pullback has weakened sentiment, but while this week’s signals continue to point lower below a stop loss at 173.16, last week’s high, while above the 100 day average, the call is a cautious one.
Targets are to 169.55, the 28th Mar low, 168.15, the 2 week base and then towards 167.20, the 8 week low trade.
FTSE
Last week’s bullish signals for FTSE 100 were confirmed, sentiment initially posting a gain of just over 100 Pts. However, sellers returned to the market on Friday from just above the 2 week high with sentiment deteriorating and forming a daily Shooting Star, for sentiment to close little changed on the week overall.
There is no clear bearish reversal pattern, but Friday’s Star leaves a negative bias to signals going into this week as long as prices remain below a stop loss at 6683.5, the 4 week top on the Jun contract.
Targets are to 6546.0, Tuesdays low, 6502.0, the 27th Mar base and then towards 6445.5, last month’s low trade on the FTSE 100.