The euro continues to test medium-term support at $1.30. With the dollar currently “the best horse in the glue factory”, support is likely to fail, signaling a re-test of the primary level at $1.26. A 63-day Twiggs Momentum peak below zero would indicate continuation of the primary down-trend; failure of primary support would confirm.
* Target calculation: 1.26 – ( 1.35 – 1.26 ) = 1.17
Sterling is testing resistance at $1.62. Recovery of 63-day Twiggs Momentum above zero indicates a primary advance, but news that the UK has dipped back into recession may inhibit further gains. Reversal below the rising trendline would warn of another test of primary support at $1.53, while breakout above $1.62 would signal an advance to the 2011 high of $1.67.
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He founded PVT Capital (AFSL number 546090), which provides income and growth strategies to wholesale clients.
Colin also co-founded Incredible Charts and writes the popular Patient Investor newsletter.
Using a top-down approach, Colin identifies macro trends in the global economy and then combines fundamental and technical analysis to evaluate opportunities in sectors that stand to benefit.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.