The Euro broke support at $1.33, signaling a further decline against the Dollar with a target of $1.30*. Falling 13-week Twiggs Momentum, below zero, warns of a strong down-trend. Recovery above $1.35 is most unlikely, but would suggest that the down-trend is slowing.
* Target calculation: 1.35 – ( 1.40 – 1.35 ) = 1.30
The recent rally of the Euro against the Russian ruble has faltered. An economic contraction and rising tensions over Eastern Ukraine both contributed. The Euro remains in an up-trend and recovery above RUB 49 would suggest another attempt at the previous high of RUB 51. But failure of support at RUB 46 would signal a primary down-trend. 13-Week Twiggs Momentum oscillating close to zero reflects current uncertainty.
Vladimir Putin is attempting to exploit fault lines in the US/European alliance, targeting the powerful European farming and motor industry lobbies. Unauthorized incursions into Ukrainian territory by his white-painted “aid convoy” are another example, where the infringement is so apparently inoffensive that Angela Merkel will find it difficult to convince her European allies to escalate sanctions further. Failure to react will merely embolden Putin to conduct further minor infringements in defiance of the EU, confident in their response, until the Ukraine suffers “death by a thousand cuts”.
Only if the US/EU adopt an aggressive escalation, as suggested here on Defence & Freedom, are they likely to contain Russian aggression.
“…a defensive and reactionary game plan makes one predictable. The very existence of a crisis should be understood as a hint that someone used this predictability to predict the outcome of a produced crisis — and arrived at the conclusion that it’s a good idea. Aka failure of deterrence.”
Japan
As with the Euro, the Japanese Yen is also weakening against the Dollar. The Greenback broke resistance at ¥103.50, signaling a rally to test the 2013 high. Follow-through above ¥104 would confirm. Rising 13-week Twiggs Momentum above zero strengthens the signal. Reversal below ¥103 is unlikely, but would warn of another test of primary support at ¥101.
Australia
The Aussie Dollar, however, is holding its own — ranging between $0.92 and $0.95 against the US Dollar. The narrow band and 13-week Twiggs Momentum holding above zero both suggest continuation of the up-trend. Breakout above $0.95 would suggest a target of $0.97. Reversal below $0.92 is unlikely at present, but would warn of a decline to the band of support between $0.87 and $0.89.
The ASX 200, retracing slightly from resistance at 5650, is also influenced by strong foreign investment flows. Indications are predominantly bullish, including 21-day Twiggs Money Flow forming troughs above zero. Follow-through above 5660 would signal another advance, with a medium-term target of 5850. Reversal above 5550 is unlikely, but would warn of another test of primary support.
* Target calculation: 5650 + ( 5650 – 5450 ) = 5850
Really Col ???? Unauthorised Incursions ??? By whose mandate mate ??? The west ?? Yours ??? ( Putin is attempting to exploit faultlines in the US/Euro alliance ???) Really Col ??? Maybe Putin is giving it to the corrupt alliance of the hypocritical US?Euro alliance (ieFIX) .. You sure have spelt out what side of the easy money wall street alliance you are from Col !
I lived under an authoritarian regime for long enough to know that they are capable of enormous evil, justified in terms of their national interest. And that was just a lite version of what Eastern Europe has been subjected to — and is again threatened by.
“Maybe Putin is giving it to the corrupt alliance of the hypocritical US/Euro alliance”
Putin is not giving it to the US or EU. He is giving it to the people of East Ukraine. Like any schoolyard bully he instinctively picks on those least capable of retaliating.
That’s a fair enough retort Colin…I live in the west and I am happy to remain in the west,and I do not question your remarks of the capability of evil in the east and Europe,history supports your comments to be sure…my reasoning is the US make out like they are the answer to all and sundry by forced democracy….(serfdom by the new kings) … Putin I am sure is a cloaked figure..however,I am sick an tired of the hypocrisy of the US government..what a bunch of legal gangsters,,Obama,Clinton,McCain..warmongers! To your credit you post all comments which is highly commendable,even when they cut you..to be sure we trade on charts..but charts can get you into big trouble if you do not take in the macro picture..and I reckon Putin is being opportunistic..maybe he is just taking out the Ukrain gansters,cheers:)
Any country is capable of committing evil acts if they are perceived to be in defense of their national interest. One could not rule out the US invading Mexico or Cuba if the government was perceived as a threat to the US. After all, they have done it before. But the more authoritarian a government is, the greater the level of atrocity they are capable of committing. If you do not respect the rights of your own citizens, you are likely to show scant regard for the rights of others.
That is why I support the promotion of democracy. Democratic nations are less of a threat to their neighbors. But we also need to focus on improving democracy and making governments more accountable to their citizens — as in the Swiss form of participative, direct democracy — in order to reduce the threat even further. One would find it hard to imagine the Swiss invading even their weakest neighbors.
Forget Putin etal. Just follow the charts. Why do you apply 21-day TMF as opposed to 13-day TMF to XJO? 21-day & 13-day TMF peaked on 25 Oct 13 and both weekly and daily have trended down since then. XJO has trended up from 25 Oct 13 to date. We have a divergence – albeit shallow. Uptrending, bullish XJO is thus unconfirmed. What do you think?
I use 21-day and 13-week Twiggs Money Flow (1-month and 3-month) to represent the secondary and primary cycles. The secondary cycle is bullish. There is a (mild) long-term divergence on 13-week TMF, but this is somewhat offset by TMF holding above zero for the last 12 months.
Thank you
Don’t get me wrong,I support democracy,although I believe western democracy has become perverted,I agree the Swiss stye of democracy is closer to true democracy ,where the citizens have greater say.As ChurchhilI said ‘Democracy is the worst form of government,until your try the alternatives”…I also believe the US is falling away from democracy and becoming more totalitarian,and let’s face it the US has been in an imperial expanisonist mode for many decades,they have troops in over 150 different countries,the number was 130 ten years ago,so the empire expands,continues to create vassal states around the world..
Let’s not forget the strategic significance of Putin’s actions,which secures a critical southern seaport for the Russian Navy…Yes Putin may be behaving like a ‘school yard bully’, Although he is ‘eyeballing’ another school yard bully thats become a quasi-global prefect and fingerpointer. The war ‘VIX’ chart must be off the charts,what if the US cannot contain itself and engages Russia? What if that becomes a fully blown confrontation? What happens to global markets then? They will Tank, pardon the pun, then they will tank some more, considering the inherent weaknesses in global economies and the fragile state of their balance books,there would be no war rally, not this time…maybe it’s time to stock up on certain items, bring in the pool umbrellas and turn on the ‘No Vacany’ sign…The bases are loaded…another apt pun.