The euro broke medium-term support at $1.32 and the rising trendline against the greenback. While this indicates trend weakness it does not necessarily mean reversal to a primary down-trend. Completion of a 63-day Twiggs Momentum trough above zero would suggest that the trend is intact — and an advance to $1.42* is on the cards.
* Target calculation: 1.36 + ( 1.36 – 1.30 ) = 1.42
Pound sterling broke long-term support at $1.53 against the greenback, offering a long-term target of $1.43*. Fall of 63-day Twiggs Momentum below -5% (its 2011 low) would strengthen the signal.
* Target calculation: 1.53 – ( 1.63 – 1.53 ) = 1.43
Against the euro, the pound is testing support at €1.15. 63-day Twiggs Momentum well below zero suggests a strong down-trend. Failure of support would offer a target of the 2011 low at €1.10.
The Aussie Dollar respected primary support at $1.015. Recovery above $1.03 and the declining trendline would suggest another rally to test $1.06. Reversal below $1.02 would warn that primary support is under threat.
Failure of primary support would offer a target of $0.96*. Oscillation of 63-day Twiggs Momentum close to zero, however, suggests a ranging market.
* Target calculation: 1.01 – ( 1.06 – 1.01 ) = 0.96
The Canadian Loonie by contrast is in a strong primary down-trend against the greenback, headed for a test of $0.96. Falling 63-day Twiggs Momentum suggests that medium-term support at $0.97/$0.98 is unlikely to hold.
The US dollar has broken its long-term declining trendline against the Japanese Yen, suggesting that the 30-year decline is over and the greenback likely to appreciate for the foreseeable future. Follow-through above ¥100 would confirm, offering a target of ¥120*.
* Target calculation: 100 – ( 100 – 80 ) = 120
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.
Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.
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.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.