ECB’s Top German Representative Resigns – WSJ.com

Germany’s top representative on the European Central Bank resigned in an apparent protest of the bank’s recent interventions in euro-zone debt markets…….Jürgen Stark is stepping down “for personal reasons,” the ECB said in a statement…… Mr. Stark, one of the ECB’s most outspoken anti-inflation “hawks,” had opposed the ECB’s decision last month to reactivate its government bond purchase program….

via ECB’s Top German Representative Resigns – WSJ.com.

GBP tests support

The Pound is testing support at $1.60/$1.59 against the greenback, dragged down by rising calls for another round of quantitative easing to assist the flagging UK economy. Failure of support would signal a primary down-trend with a target of $1.53*.

GBPUSD

* Target calculation: 1.60 – ( 1.67 – 1.60 ) = 1.53

Swiss Franc weakens on SNB action

The Swiss National Bank (SNB) threw a similar lifeline to Swiss exporters and tourist industry, pledging to support their currency at 1.20 Swiss Francs against the euro with “utmost determination” and to “buy foreign currency in unlimited quantities” to achieve this. [Bloomberg]

The euro jumped from 1.10 to 1.20 CHF on Tuesday and has been trading in a narrow range between 1.20 and 1.21 since then. Further speculation is inadvisable unless you have deep enough pockets to take on the SNB.

EURCHF

Euro tests support

Germany’s high court threw Chancellor Merkel a lifeline, ruling that bailouts of struggling euro-countries are legal in terms of the German constitution. But they also created an obstacle to further assistance, requiring that parliament vote on any future bailout decisions. [WSJ]

The euro continues to test support at $1.40 against the greenback. Failure would signal a primary down-trend with a target of $1.30*.

EURUSD

* Target calculation: 1.40 – ( 1.50 – 1.40 ) = 1.30

Europe consolidates

Dow Jones Europe Index ($E1DOW) recovered above 230 and is expected to consolidate between 230 and 250. The bear market remains strong, with 13-week Twiggs Money Flow below zero indicating selling pressure. Reversal below 230 would test the 2010 low of 205, though the calculated target is lower*.

Dow Jones Europe Index $E1DOW

* Target calculation: 230 – ( 265 – 230 ) = 195

Euro tests primary support at $1.40

The euro broke its medium-term trendline against the dollar at [TX] and is headed for another test of primary support at $1.40. Failure of support would offer a target of $1.30*.

EURUSD

* Target calculation: 1.40 – ( 1.50 – 1.40 ) = 1.30

DAX breaks support

Dow Jones Germany Index broke support at 210/205 Monday, warning of another sharp fall as the ECB ramps up bond purchases and German participation in the bailout program is challenged in their High Court. Plunging 13-week Twiggs Money Flow indicates strong selling pressure. Target for the fall is the 2009 low of 150*.

DJ Germany Index

* Target calculation: 200 – ( 250 – 200 ) = 150

The DAX Index similarly broke support at 5500, offering a target of 4500*.

DAX Index

* Target calculation: 5500 – ( 6500 – 5500 ) = 4500

Here We Go: US Futures Plunge As Milan, Dax Down 5%, Italian Fins Halted, EURUSD Sub 1.41 | ZeroHedge

After the ECB just announced that it had monetized a whopping E13.3 billion in the past week, nearly double expectations, and a total of E134 billion since the SMP program’s inception, the market took one quick look at just how effective this program has been, shuddered, and plunged realizing that neither ECB intervention, nor the shorting halt is doing anything at all.

via Here We Go: US Futures Plunge As Milan, Dax Down 5%, Italian Fins Halted, EURUSD Sub 1.41 | ZeroHedge.

European rally meets resistance

The FTSE 100 index is meeting selling pressure in its rally to test resistance at 5600, evidenced by tall shadows on the last two candles. Reversal of 13-week Twiggs Money Flow below zero would strengthen the signal. Failure of support at 4800 would offer a target of 4000*.

FTSE 100 Index

* Target calculation: 4800 – ( 5600 – 4800 ) = 4000

The DAX Index also displays tall shadows on the last two weekly candles. The rally to test 6400 is particularly weak, with decline of 13-week Twiggs Money Flow below zero warning of strong selling pressure. Reversal below 5400 would offer a target of 4400*.

DAX Index

* Target calculation: 5400 – ( 6400 – 5400 ) = 4400

The CAC-40 displays similar selling pressure. Breakout below 2900 would offer a target of 2500*.

CAC-40 Index

* Target calculation: 2900 – ( 3300 – 2900 ) = 2500