Forex: Euro declines while Aussie follows through

The euro retreated below support at $1.30, indicating a correction to primary support at $1.2650. A 63-day Twiggs Momentum trough close to zero would suggest a primary advance, with a long-term target of $1.50*.

* Target calculation: 1.35 + ( 1.35 – 1.20 ) = 1.50

Pound sterling found short-term support against the dollar but the long-term target for the decline is $1.43*. Declining 63-day Twiggs Momentum, below its 2011 lows, strengthens the signal.

* Target calculation: 1.53 – ( 1.63 – 1.53 ) = 1.43

The Aussie Dollar followed through after breaking out above $1.03, signaling a rally to $1.06. Reversal below $1.02 is now unlikely, but would warn that primary support at $1.015 is again under threat. Narrow fluctuation of 63-day Twiggs Momentum around zero suggests a ranging market.

The Canadian Loonie found medium-term support at $0.97 against the greenback, but we should still expect a test of primary support at $0.96. Failure would warn of a decline to $0.90*, but respect is just as likely and would signal a rally to $1.02.

* Target calculation: 0.96 – ( 1.02 – 0.96 ) = 0.90

The US dollar continues to advance against the Japanese Yen, suggesting that the 30-year down-trend is over. Expect resistance at ¥100, with a possible correction back to ¥90, but breakout would test the 2007 high above ¥120*.

* Target calculation: 100 – ( 100 – 80 ) = 120