THE TIPSTER

 
Philip Salter
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THE last time the euro was trading at these levels against the yen was in June 2001 and it appears that traders see the Japanese currency as the strongest safe haven in the midst of the Eurozone debt crisis. This is down to Japan’s current account surplus, which means it doesn’t have to rely so much on foreign capital. Capital Spreads quotes euro-yen at ¥104.90-¥104.93

Today’s UK jobless claim figures could increase the pressure sterling-dollar is already under. With higher job growth comes economic expansion, which could spark inflationary pressures, and as the pair remains capped by the bearish trend line, market pessimists could enjoy the breakthrough of supports around $1.57500. Capital Spreads quotes $1.58371-$1.58391.

The recent technical break below $1.4000 in euro-dollar now opens up the possibility of further losses towards the $1.3000 level in the longer term. However, traders should be wary of short squeezes back towards the $1.3840 level. CMC Markets offers $1.36390-$1.36397.

With the euro in freefall, as worries about the Eurozone intensify, there is growing pressure on the Swiss National Bank to sustain the SFr1.20 peg to the euro. The Swissie is falling against all G20 currencies with most acute losses coming against the yen, depreciating by a whopping 20 per cent since early August. With so much focus and attention on the Eurozone and the accompanying bailouts this week, a strong Swissie reversal is a very plausible scenario. On Swiss franc-yen Alpari quotes ¥87.24-¥87.27.

The euro’s weakness has allowed sterling to gain the upper hand in the battle of the two European majors, taking sterling-euro back above the €1.1600 level. This mini breakout through resistance has taken the pair back above its 200 day moving average, which could see it rally further towards the next resistance around €1.1765. Capital Spreads quotes sterling-euro at €1.1600-€1.1603.

After recommending a sell last week of Australian dollar-dollar on approaches towards $1.0650, traders had multiple opportunities last week to get short as the pair repeatedly bounced off these levels. Then the Aussie started to dive on Friday and didn't stop until it hit lows around $1.0260, where it looks like we might have bottomed. Look to trade to the long side this week from around $1.030, for a bounce back towards $1.05. Spread Co quotes $1.03450-$1.03470.