CURRENCY TRADES FOR 2013
Euro against the dollar
The single currency appears to be forming a potential double top formation at the 1.3400 level. Only a move towards the 1.3500 level negates this scenario, a break of which targets 1.3835, the 61.8 per cent retracement of the 1.4940/1.2045 down move. A break below 1.3250 where we have the base suggests a test towards the long term support line from the 1.2045 lows now at 1.3035 which remains the key level on the downside.
Sterling against the dollar
Last week’s break below the 200 day moving average at 1.5910 could well see further losses start to unwind if we break below the November lows at 1.5825. This area is also a 50 per cent retracement of the 1.5270/1.6380 up move. A break here targets 1.5680.
The pound needs to push back through 1.6050 to retarget 1.6130.
Euro against sterling
The 0.8420 level remains a key resistance given that it is 50 per cent retracement of the down move from 0.9085 to the lows at 0.7755. The 0.8325 level should now act as support on any pullbacks. Long term trend line support at 0.8100 comes in from the 0.7755 lows.
The dollar against Japanese yen
The dollar continues to remain underpinned as it continues to hold above support at 90.30 on course for the 92.50 level initially and long term target at 94.00. Only less than 90.30 argues a steeper fall towards key support at 87.50.
