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The Bank of Japan is taking measures to suppress the yen against the greenback. The long-term chart shows why their efforts are destined to fail: the dollar has maintained a strong down-trend against the yen for a number of years. Failure of support at ¥76 would indicate that the BOJ’s latest efforts have failed and will offer a target of 72*.
* Target calculation: 76 – ( 80 – 76 ) = 72
The euro retreated below $1.40 and is now consolidating at $1.36. Failure of medium-term support would test the primary level at $1.32. In the long-term, breach of $1.32 (if the Greeks vote “No”) would offer a target of $1.22*. 63-Day Twiggs Momentum holding below the zero line suggests continuation of the primary down-trend.
* Target calculation: 1.32 – (1.42 – 1.32 ) = 1.22
63-Day Twiggs Momentum similarly suggests continuation of the primary down-trend for the Pound. Breach of primary support at $1.53 would confirm, offering a target of $1.46*.
* Target calculation: 1.53 – ( 1.60 – 1.53 ) = 1.46
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
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.
The spokesman of French president Nicolas Sarkozy…. said the [Greek] move was “irrational and dangerous”. Rainer Brüderle, Bundestag leader of the Free Democrats, said the Greeks appear to be “wriggling out” of a solemn commitment. They face outright bankruptcy, he blustered.
Well yes, but at least the Greeks are stripping away the self-serving claims of the creditor states that their “rescue” loan packages are to “save Greece”. They are nothing of the sort. Greece has been subjected to the greatest fiscal squeeze ever attempted in a modern industrial state, without any offsetting monetary stimulus or devaluation.