Australia & NZ Archives - Page 79 of 96

July 12, 2012

Forex: Euro, Pound Sterling, Canadian Loonie, Australian Dollar and Japanese Yen

The Euro broke medium-term support at $1.23, signaling a test of the 2010 low at $1.19/$1.20. Declining 63-day Twiggs Momentum warns of a strong down-trend. Breach of the 2010 low becomes likely if the ECB had to indicate an intention to directly or indirectly purchase government bonds — and would suggest a long-term decline.

Euro/USD

Pound Sterling broke through €1.26 against the Euro and is now retracing to test the new support level. Rising 63-day Twiggs Momentum indicates an accelerating up-trend. Respect of support is likely and would offer a target of €1.29.

Pound Sterling/Euro

* Target calculation: 1.26 + ( 1.26 – 1.23 ) = 1.29

Canada’s Loonie is weakening against the Aussie Dollar but long-term bullish divergence on 63-day Twiggs Momentum (and breach of the descending trendline) warns of reversal to an up-trend. Breakout above parity would confirm.

Canadian Loonie/Aussie Dollar

The Aussie Dollar broke support at $1.02 USD and its recent broadening wedge on the 2-hour chart. Expect a decline to $1.01; confirmed if short-term support at $1.015 is broken.

Aussie Dollar/USD

* Target calculation: 1.02 – ( 1.025 – 1.015 ) = 1.01

A long-term chart shows the US dollar forming a bottom against the Yen after long-term bullish divergence on 63-day Twiggs Momentum and breach of the descending trendline. Breakout above the current descending trendline and resistance at ¥80 would indicate another test of ¥84/¥85, while breach of that level would confirm a primary up-trend.

Aussie Dollar/Japanese Yen

* Target calculation: 84 + ( 84 – 78 ) = 90

Colin Twiggs

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.

July 9, 2012

Basel takes aim at Mega Bank | | MacroBusiness

Deep T: As the research previously posted here on MB shows, Mega Bank [the big four Australian banks: NAB, CBA, WBC and ANZ] carries a level of capital against residential mortgages that is less than 2% even with mortgage insurance. Mega Bank uses internal risk based models to determine the amount of capital which are primarily based on the historical default rate of Australian mortgages relative to loan to value ratios. The period over which Mega Bank assesses the historical default rate is primarily over a period of rising house prices fueled by the expansion of mortgage credit by Mega Bank. Thereby masking probable default levels over a more benign period…..

via Basel takes aim at Mega Bank | | MacroBusiness.

Colin Twiggs

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.

July 5, 2012

Forex: Euro, Pound Sterling, Canadian Loonie, Australian Dollar, Japanese Yen and South African Rand

The Euro broke support at $1.25 before falling sharply through $1.24, warning of another decline. Narrow consolidation below the new resistance level is a bearish sign. Follow-through below $1.23 would offer a target of $1.20.

Euro/USD

Pound Sterling broke resistance at €1.25 against the Euro, offering a target of €1.28.

Pound Sterling/Euro

* Target calculation: 1.250 + ( 1.250 – 1.215 ) = 1.285

Canada’s Loonie is strengthening against the US Dollar on the back of rising oil prices. Expect another test of $1.02.

Canadian Loonie/US Dollar

The Aussie Dollar threatens to break down from its recent flag formation. Failure of support at $1.025 would suggest a test of $1.01.

Aussie Dollar/USD

The Aussie Dollar continues to range between ¥72 and ¥90 Japanese Yen. Dips are getting shorter and range traders may need to move their base to ¥75.

Aussie Dollar/Japanese Yen

Against the South African Rand, the Aussie Dollar is testing resistance at R8.50. Breakout would offer a target of R9.00. Narrow consolidation above R8.30 would be a bullish sign.

Aussie Dollar/South African Rand

* Target calculation: 8.50 + ( 8.50 – 8.00 ) = 9.00

Colin Twiggs

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.

July 4, 2012

Australian Dollar

The Aussie Dollar is forming an ascending flag after breaking resistance at $1.02 on the 2-Hour chart. Reversal below $1.025 would retrace to at least $1.01, while upward breakout from the flag would offer a target of $1.05*.

Australian Dollar/USD

* Target calculation: 1.03 + ( 1.02 – 1.00 ) = 1.05

Colin Twiggs

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.

July 3, 2012

Australia: ASX 200

The ASX 200 continues to range between 3900/4000 and 4150. Twiggs Money Flow (21-day) oscillating around zero indicates uncertainty. Narrow consolidation below 4150 would be a bullish sign and breakout would test the May high of 4450. Reversal below 3900/4000 is less likely but would warn of a primary decline.

ASX 200 Index

Colin Twiggs

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.

June 28, 2012

Forex: Euro, Pound Sterling, Australian Dollar and Canadian Loonie

The Euro retreated below support at $1.26, indicating a test of the 2010 low at $1.19/1.20. Breach of the rising trendline on 63-day Twiggs Momentum would strengthen the bear signal.

Euro/USD

Pound Sterling is testing resistance at $1.58 against the greenback. Respect would indicate another test of primary support at $1.52. A 63-day Twiggs Momentum peak below zero would warn of a primary down-trend.

Pound Sterling/USD

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

Against the Euro, Pound Sterling is in an accelerating up-trend. The gap between the recent low at €1.225 and the previous peak at €1.215 suggests strong buying pressure — as does 63-day Twiggs Momentum oscillating high above zero.

Pound Sterling/Euro

* Target calculation: 1.250 + ( 1.250 – 1.215 ) = 1.285

Canada’s Loonie is strengthening against the Aussie Dollar. Long-term bullish divergence on 63-day Twiggs Momentum warns of reversal to a primary up-trend. Breakout above parity would confirm.

Canadian Loonie/Aussie Dollar

* Target calculation: 1.00 + ( 1.00 – 0.96 ) = 1.04

Short retracement suggests that the Aussie Dollar is, in turn, strengthening against the greenback on the Daily chart. Breakout above $1.02 (and the descending trendline) would indicate that a bottom is forming. Recovery of 63-day Twiggs Momentum above zero would suggest a primary up-trend.

Aussie Dollar/USD

* Target calculation: 1.02 + ( 1.02 – 1.00 ) = 1.04

Colin Twiggs

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.

June 26, 2012

Australia: ASX 200

A monthly chart of the ASX 200 shows how the index tends to peak ahead of the CRB Commodities Index and Australian Dollar but then fall in step with them from there on. The ASX 200 was first to reverse direction in 2011 but commodities now lead the way. Expect Australian stocks — and the Aussie Dollar — to follow commodities lower. Breach of primary support at 3850 would offer a target of 3200*.

ASX 200, CRB Commodities Index, AUDUSD - Monthly Chart

* Target calculation: 3800 – ( 4400 – 3800 ) = 3200

On the daily chart, breach of support at 3980/4000 would signal a test of primary support at 3850. Reversal of 21-day Twiggs Money Flow below zero, warning of medium-term selling pressure, increases the likelihood of a downward breakout.

ASX 200 Index

* Target calculation: 4000 – ( 4150 – 4000 ) = 3850

Colin Twiggs

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.

June 21, 2012

A tilt in Australian liberalism | MacroBusiness

Houses and Holes: As I have noted in the past that, for the most part, Australian political economy is divided pretty simply into two teams. On one side you have a kind of bastardised social liberalism in which trade union thugs wield power via the Labor Party and are supported by a cultural community of Irish-Catholic derived “battlers”. On the other side, you have an equally bastardised neo-liberalism in which corporations wield power via the Liberal Party and are supported by a cultural community of English-Protestant derived “bludgers”. Whether the members of either team are from Vietnam, Israel, Lebanon or Lapland, rich or poor is irrelevant. This is our tribal political culture……

via A tilt in Australian liberalism | | MacroBusiness.

Colin Twiggs

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.

June 21, 2012

Forex: Europe, Australia, Canada, South Africa and Japan

The Euro is testing its new resistance level at $1.26. Respect would offer a target of $1.17*. Bullish divergence on 63-day Twiggs Momentum, however, warns that the down-trend is weakening; recovery above zero would suggest reversal to a primary up-trend. Breach of the descending trendline would strengthen the signal.

EUR/USD

* Target calculation: 1.26 – ( 1.35 – 1.26 ) = 1.17

Pound Sterling displays a strong up-trend against the euro, again testing resistance at €1.25. Breakout would signal an advance to €1.30*. 63-Day Twiggs Momentum oscillating high above zero indicates trend strength.

GBP/USD

* Target calculation: 1.26 + ( 1.26 – 1.22 ) = 1.30

The Greenback has corrected sharply against the Japanese Yen before finding medium-term support at ¥78. Recovery above ¥80 (and the descending trendline) would indicate that the correction is over, while breach of support would test primary support at ¥75.50/76.50. The long-term bullish divergence on 63-Day Twiggs Momentum continues to warn of reversal to an up-trend.

USD/JPY

* Target calculation: 84 + ( 84 – 78 ) = 90

Sharply falling crude oil prices have weakened Canada’s Loonie relative to the Aussie Dollar. Against the greenback, the Loonie bounced of short-term support at $0.96 but this is unlikely to last and we should expect a test of primary support at $0.94/0.95. A 63-day Twiggs Momentum peak below zero would warn of a primary down-trend.

Canadian Dollar

* Target calculation: 0.96 – ( 0.98 – 0.96 ) = 0.94

The Aussie Dollar lifted along with commodity prices and is headed for a test of $1.02 (USD). Upward breakout would signal an advance to $1.08, while respect of resistance (and the descending trendline) would warn of a decline to $0.90*. A 63-day Twiggs Momentum peak below zero would strengthen the bear signal.

Aussie Dollar

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

The Aussie Dollar is headed for a test of resistance at R8.50 (South African Rand). Breakout would offer a target of R9.00*. Reversal of 63-Day Twiggs Momentum below zero, however, would warn of a primary down-trend.

Aussie Dollar/South African Rand

* Target calculation: 8.50 + ( 8.50 – 8.00 ) = 9.00

Colin Twiggs

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.

June 17, 2012

Asia-Pacific stocks surge on Greek election results

ASX 200 Index is testing resistance at 4120 after Greek voters narrowly favored the New Democracy party in Sunday’s election — meaning that Greece is likely to remain in the euro-zone. Bullish divergence on 21-day Twiggs Money Flow indicates medium term buying pressure — following breach of the descending trendline suggested that the correction was over. Follow-through above 4150 would strengthen the signal, offering a target of the May high at 4450.

ASX 200 Index

Dow Jones South Korea Index respected support at 402. Breakout above 420 would confirm that the down-trend is over. Recovery of 63-day Twiggs Momentum above zero would strengthen the signal.

Dow Jones South Korea Index

Dow Jones Japan Index is testing the descending trendline and short-term resistance at 49. 63-Day Twiggs Momentum still reflects a primary down-trend, but breach of the descending trendline would warn that a bottom is forming.

Dow Jones Japan Index

Dow Jones Hong Kong Index is testing medium-term resistance at 388. Breach of the descending trendline warns that a bottom is forming. Upward breakout would indicate a rally to 440. Recovery of 63-day Twiggs Momentum above zero would strengthen the signal.

Dow Jones Hong Kong Index

Colin Twiggs

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.