The Kiwi respected the band of resistance at $0.80/$0.82 against the greenback, warning of a primary decline. Earlier breach of the rising trendline strengthens the signal. Failure of support at $0.75 would offer a target of $0.70.
* Target calculation: 0.75 – ( 0.80 – 0.75 ) = 0.70
The Aussie Dollar is headed for a test of support at $1.01/$1.00. Recovery above $1.08 would complete an inverted head and shoulders, but there is still some way to go. Breach of support would warn of another primary decline. In the long-term, failure of support at $0.94 would offer a target of $0.80, while breakout above $1.08 would indicate a target of $1.22.
* Target calculation: 0.94 – ( 1.08 – 0.94 ) = 0.80
CRB Commodities Index is testing the descending trendline at 320. Breakout would suggest that the down-trend has weakened and the index is forming a bottom; respect would indicate another test of primary support at 295. Breach of the long term rising trendline would warn of another test of 2009 lows at 200.
Brent crude is also testing its descending trendline, at $110/barrel. Respect would signal another test of primary support at $99, while breakout would suggest that the down-trend has ended. In the long-term, breach of the rising trendline would warn of a decline to around $70/barrel.
Spot gold is testing support at $1700/ounce after its recent breakout above the descending trendline and resistance (at $1700). Respect of support would indicate a primary advance to $1900. In the long term, breakout above $1900 would offer a target of $2200, while failure of support at $1600 would warn of a primary down-trend.
* Target calculation: 1900 + ( 1900 – 1600 ) = 2200
Amex Gold Bugs Index is headed for another test of the upper border of its right-angled broadening wedge formation. The pattern is bearish and breakout below 500 would warn of a primary reversal for spot gold.
The Dollar Index is consolidating below resistance at 77.50. Breach of the descending trendline suggests the correction is over and recovery of 63-day Twiggs Momentum above the zero line indicates that the primary trend remains upward. Breakout above 77.50 would offer a medium-term target of 80*.
* Target calculation: 77.50 + ( 77.50 – 75.00 ) = 80.00
10-Year Treasury Yields are testing medium-term support at 2.00 percent. Failure would indicate another primary decline — and bad news for stocks.
India’s Sensex index retraced to test the new support level at 17500. The primary trend remains downward but respect of support at 17500 would confirm a rally to the descending trendline. Bullish divergence followed by a cross to above zero on 13-week Twiggs Money Flow indicates buying support.
* Target calculation: 17 + ( 17 – 16 ) = 18
The Singapore Straits Times Index is testing the band of resistance at 2900/2950. Respect would indicate another test of primary support at 2500, while breakout would offer a target of 3300*. 63-Day Twiggs Momentum below zero indicates that the index is still in a primary down-trend.
* Target calculation: 2900 +( 2900 – 2500 ) = 3300
Dow Jones Shanghai Index is advancing to resistance at 330 and the descending trendline. Respect would indicate another primary decline, with a target of 250*, while breakout would signal that a bottom is forming.
* Target calculation: 290 – ( 330 – 290 ) = 250
Take a look at the [Chinese] Leading Index’s sharp deterioration recently – there has been a clear and material deterioration in the leading index over the past couple of months. This suggests to us a substantial further fall in Chinese GDP. The last release of a week or so ago showed Chinese GDP growing at 9.1% against expectations of 9.1%. This leading index to us suggests that this growth rate will fall to 8% which is getting dangerously close to the “hard landing” territory.
via China’s leading indicators head south – macrobusiness.com.au | macrobusiness.com.au.
“Does Greece want to remain part of the euro zone or not,” German Chancellor Angela Merkel said. “That is the question the Greek people must now answer.”
…. if voters spurn the bailout deal, Greece could face national bankruptcy and exit from the euro, while leaving Europe confronting an almighty financial panic and an economic slump.
China already runs its own risk of massive losses on the currency reserves – now worth $3,200bn – it has accumulated. That was a public capital outflow aimed at supporting its trade surpluses. But, in its attempts at managing the currency relationship with the US, it is the latter that controls the central bank. China can huff and puff. But it must either buy the money the US creates, to preserve competitiveness, or stop doing so. If it buys, it throws good money after bad. If it stops buying, it imposes a shock on itself.
