If the Euro does not find strong buying support there and instead finds itself spending much of its time below 0.89 and even closes the week below 0.8900, it may end up confined to a sub-0.9000 region for several weeks ahead. Technical Indicators, Classical charting, Candlesticks and Bollinger Bands, all say that Dollar-Yen should be sold. A target of 120.00-119.50 might be reasonable for the week ahead and 118 can be seen in the week after. Please note here, that it is very likely for 122.00 to be seen on Monday. A daily close above 123.50 may signal an unexpected rise to 124 and even 125.
Cable is also at a crucial juncture.
A fall to and daily close near 1.41 can lead to a further decline to 1.39-1.38. On the other hand, a rise above 1.43 can take it to 1.4350-1.4400. There are many factors supporting a bounce in the market, at least in the short term. Fourthly, a market which had been disappointed by the 50bp cut that the FOMC delivered last week, might take heart from the idea that the Fed has kept some of its powder dry in order to be able to administer further cuts, as required, in the weeks ahead. It might be folly to initiate new Short positions at current levels.