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Mizuho Corporate Bank

Weekly Technical Commentary 09 August 2010


Links: http://www.mizuho-sc.com/ Bloomberg Page: MIZH Website: http://www.mizuho-cb.co.uk/

EUR/JPY Chart Levels: Support 112.00..111.00..110.00..108.00. Resistance 113.50..114.75..115.50..116.55


EURJPY=EBS, Last Quote [Candle], Last Quote [Ichimoku 9, 26, 52, 26] Weekly
17Oct09 - 13Feb11 This week This month
EURJPY=EBS , Last Quote, Candle Pr
15Aug10 113.51 113.68 113.33 113.65 138
EURJPY=EBS , Last Quote, Tenkan Sen 9
15Aug10 111.02 136
EURJPY=EBS , Last Quote, Kijun Sen 26
15Aug10 117.63
EURJPY=EBS , Last Quote, Senkou Span(a) 52
06Feb11 114.32
134
Nothing to add as we continue with tiny moves
sideways, this one close to the May and June
EURJPY=EBS , Last Quote, Senkou Span(b) 52
06Feb11 122.90 132
EURJPY=EBS , Last Quote, Chikou Span 26
21Feb10 113.65
130 highs around 113.50/114.40. While below this
128 area we shall continue to allow for another
126
imminent if unspectacular downside probe. This
124
is more likely to occur when and if dollar/yen
probes below the key 85.00 level. As always the
122
deeper the downside test the greater the risk of
120
intervention and the bigger the corrective
118 bounce that follows, making trading strategy
116 very difficult. One-month at-the-money implied
114
volatility should hold above its long term mean
112
at 11.00%. Slightly worrying to our view though
is that not only have daily moving averages
crossed to a buy but prices are actually
110

108
managing to edge into a very large ‘cloud’.
Nov09 Dec Jan10 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan11 Feb

GBP/JPY Chart Levels: Support 134.35..133.85..132.00..130.75. Resistance 137.55..138.00..138.90..139.35.


GBPJPY=R, Bid [Candle], Bid [Ichimoku 9, 26, 52, 26] Weekly
07Jun09 - 13Feb11 This week This month
Pr
GBPJPY=R, Bid, Candle 164
15Aug10 136.43 136.97 136.16 136.52
GBPJPY=R, Bid, Tenkan Sen 9
162
15Aug10 134.36
GBPJPY=R, Bid, Kijun Sen 26
160
15Aug10 136.34
GBPJPY=R, Bid, Senkou Span(a) 52
158
Small weekly ranges dominate and all elements
of this weekly Ichimoku ‘cloud’ chart point to a
06Feb11 135.35
GBPJPY=R, Bid, Senkou Span(b) 52
06Feb11 142.12 156
GBPJPY=R, Bid, Chikou Span 26
21Feb10 136.52 154
short position. Perhaps the Lagging Span will
152 struggle with the large dark ‘candle’ of late
150 February. Note that momentum has been
148 bearish throughout the whole of 2010 and we
146 remind that the all-time low was 118.80 in
144
January 2009. In 1995 Sterling/yen set a low at
142
128.20, underlining the pound’s long term trend
140
to weakness. Though above its long term
mean, one-month at-the-money implied
138

volatility remains relatively subdued. Mean


61.8 136

134

132
regression since 1980 lies at 142.00, one
75.0 130
standard deviation below that at 114.50,
78.6 128
something that might be a possibility although
126 currently not our favoured view.
Jul09 Aug Sep Oct Nov Dec Jan10 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan11 Feb

Produced by London Branch - Nicole Elliott +44-20-7786-2509 (email: Nicole.Elliott@mhcb.co.uk)

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.

Charts provided by Reuters.

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