Forex: Dollar and Sterling strengthen

The Euro is rallying for another test of resistance at $1.37 after finding support at $1.3350 against the greenback. Troughs above zero on 13-week Twiggs Momentum suggest a healthy up-trend. Breakout above $1.37 would signal an advance to $1.40*. Respect of resistance, indicated by reversal below the secondary rising trendline, would, however, warn of a correction to the primary trendline at $1.31.

Euro/USD

* Target calculation: 1.37 + ( 1.37 – 1.34 ) = 1.40

Sterling breakout above resistance at €1.20 signals a primary up-trend. Recovery of 13-week Twiggs Momentum above zero strengthens the signal. Target for the advance is €1.23*. Reversal below €1.19 is unlikely, but would warn of another test of €1.1650.

Sterling/Euro

* Target calculation: 1.20 + ( 1.20 – 1.17 ) = 1.23

The Greenback is likely to retrace to test the new support level at ¥101 Japanese Yen. Respect would confirm an advance with a target of ¥108*. The trough above zero on 13-week Twiggs Momentum strengthens the signal. Reversal below ¥101 is unlikely, penetration of the rising trendline warning of trend weakness.

USD/JPY

* Target calculation: 1.01 + ( 1.01 – 0.94 ) = 1.08

Canada’s Loonie broke primary support at $0.94, signaling another decline with a target of $0.915*. A peak below zero on 13-week Twiggs Momentum strengthens the signal. Recovery above $0.945 is unlikely, but would warn of a bear trap.

Canadian Loonie

* Target calculation: 0.945 – ( 0.975 – 0.945 ) = 0.915

The Aussie Dollar is heading for a test of primary support at $0.89. The peak below zero on 13-week Twiggs Momentum signals continuation of the down-trend. Breakout below $0.89 would offer a long-term target of $0.81*, while respect of support would suggest a rally to $0.93. The RBA needs a weaker Aussie Dollar, without lowering interest rates, and will do all it can to assist the decline.

Aussie Dollar

* Target calculation: 0.89 – ( 0.97 – 0.89 ) = 0.81

DAX leads the way

The FTSE 100 continues to test support at 6600. Upward breakout from the recent flag formation would signal an advance to the December 1999 high of 6950/7000*. Falling 13-week Twiggs Money Flow suggests medium-term selling pressure, but a trough above zero would be a long-term bull signal. Breach of 6600 would warn of a correction to primary support and the rising trendline at 6400.

FTSE 100

* Target calculation: 6700 + ( 6700 – 6400 ) = 7000

Dow Jones Euro Stoxx 50 continues its test of resistance at 3100 on the monthly chart. Rising 13-week Twiggs Momentum suggests a primary up-trend. Breakout above 3100 would signal an advance to 3500*. Reversal below 3000 is unlikely, but would indicate a correction to the rising trendline.

Euro Stoxx 50

* Target calculation: 3000 + ( 3000 – 2500 ) = 3500

Germany’s DAX leads the way with a strong advance to 9500*. Steeply rising 13-week Twiggs Money Flow signals strong buying pressure. Respect of the target at 9500 would suggest a correction to the rising trendline and support at 8500.

DAX

* Target calculation: 8500 + ( 8500 – 7500 ) = 9500

FTSE flags further gains

Upward breakout from the recent flag formation on the FTSE 100 would signal an advance to the December 1999 high of 6950/7000*. Rising 13-week Twiggs Money Flow suggests medium-term buying pressure, but the specter of a long-term bearish divergence remains. Expect strong resistance at 7000. Reversal below 6600 is unlikely, but would warn of a correction to primary support and the rising trendline at 6400.

FTSE 100

* Target calculation: 6700 + ( 6700 – 6400 ) = 7000

Narrow consolidation on Dow Jones Euro Stoxx 50 above support at 3000 is also a bullish sign. Rising 13-week Twiggs Momentum suggests a primary up-trend. Breakout above 3100 would confirm an advance to 3500*. Reversal below 3000 is unlikely, but would warn of a correction to the rising trendline.

Euro Stoxx 50

* Target calculation: 3000 + ( 3000 – 2500 ) = 3500

Germany’s DAX is heading towards its target of 9500*, with steeply rising 13-week Twiggs Money Flow signaling strong medium-term buying pressure. Breach of the latest trendline is not likely, would indicate a correction to support at 8500.

DAX

* Target calculation: 8500 + ( 8500 – 7500 ) = 9500

Stronger dollar drives Euro & Aussie lower

The Euro continues to test support at $1.3350 against the greenback after a false break above the February high of $1.37. Breach of support would warn of a bull trap, and follow-through below $1.31 and the rising trendline would signal a reversal. 13-Week Twiggs Momentum, however, continues to indicate a primary up-trend; a trough above zero would strengthen the signal. Recovery above $1.37 is less likely, but would signal a fresh advance.

Euro/USD

* Target calculation: 1.38 + ( 1.38 – 1.34 ) = 1.42

Sterling is testing resistance at €1.20. Recovery of 13-week Twiggs Momentum above zero suggests an up-trend. Breakout above €1.20 would signal an advance to €1.23*. Respect of resistance is unlikely, but would suggest another test of €1.1650.

Sterling/Euro

* Target calculation: 1.20 + ( 1.20 – 1.17 ) = 1.23

The Greenback is headed for another test of resistance at ¥101. The bullish ascending triangle suggests an upward breakout with a target of ¥108. Breakout above ¥101 would confirm. 13-Week Twiggs Momentum descended steeply over the length of the consolidation, but completion of a trough above zero (recovery above say 5%) would indicate a primary up-trend. Reversal below support at ¥96 is now unlikely.

USD/JPY

* Target calculation: 1.01 + ( 1.01 – 0.94 ) = 1.08

Recovery of Canada’s Loonie above $0.96 would complete a second higher trough against its US neighbor. Breakout above $0.9750 would signal a primary up-trend, but breach of primary support at $0.9450 is as likely and would signal continuation of the primary down-trend. Another 13-week Twiggs Momentum peak below zero would also indicate a down-trend.

Canadian Loonie

The Aussie Dollar is testing medium-term support at $0.93*. Respect of the zero line by 63-day Twiggs Momentum suggests continuation of the down-trend. Breach of support at $0.93 would confirm, signaling a test of primary support at $0.89. Recovery above $0.9450 is less likely, but would a rally to $0.9750. The RBA needs a weaker Aussie Dollar, without lowering interest rates, and will do all it can to assist the decline.

Aussie Dollar

* Target calculation: 0.975 + ( 0.975 – 0.95 ) = 1.00

The Aussie continues to test support at $1.12 against its Kiwi neighbor. Rising Momentum suggests another rally to $1.16, confirmed if resistance at $1.14 is broken. But breakout below $1.12 would signal a decline to $1.08*. Breakout above $1.16 would complete a triple-bottom reversal with a target of $1.20*.

Kiwi Dollar

* Target calculations: 1.12 – ( 1.16 – 1.12 ) = 1.08 OR 1.16 + ( 1.16 – 1.12 ) = 1.20

DAX leads European advance

Germany’s DAX broke through resistance at 9000, sharply rising 13-week Twiggs Money Flow signaling strong medium-term buying pressure. Target for the current advance is 9500*. Reversal below 9000 is unlikely, but would warn of a correction to the primary trendline between 8000 and 8500.

DAX

* Target calculation: 8500 + ( 8500 – 7500 ) = 9500

Dow Jones Euro Stoxx 50 is testing support at its 2009/2011 high of 3000. Rising 13-week Twiggs Momentum suggests a primary up-trend. Respect of support at 3000 is likely and follow-through above 3100 would confirm an advance to 3500*.

Euro Stoxx 50

* Target calculation: 3000 + ( 3000 – 2500 ) = 3500

Spain’s Madrid General Index found medium-term resistance at 1000. A correction to test support at 900 is likely, with 13-week Twiggs Money Flow falling sharply. Respect of 900 would suggest a healthy primary up-trend. Reversal below 900 is unlikely, but would indicate the primary trend is weakening.

Madrid General Index

* Target calculation: 900 + ( 900 – 750 ) = 1050

The FTSE 100 is retracing to test support at 6600. Long tails indicate short-term buying pressure. Follow-through above 6800 would indicate an advance to the December 1999 high of 6950/7000*. Rising 13-week Twiggs Money Flow suggests medium-term buying pressure, but the specter of a long-term bearish divergence remains. Expect strong resistance at 7000. Reversal below 6600 is unlikely, but would warn of a correction to primary support at 6400.

FTSE 100

* Target calculation: 6700 + ( 6700 – 6400 ) = 7000

European stocks advance

The FTSE 100 is testing its new support level at 6700. Follow-through above 6800 would indicate respect — and an advance to the December 1999 high of 6950/7000*. Rising 13-week Twiggs Money Flow suggests buying pressure. Reversal below 6600 is unlikely, but would warn of a correction to primary support at 6400.

FTSE 100

* Target calculation: 6700 + ( 6700 – 6400 ) = 7000

Dow Jones Euro Stoxx 50 is testing support at its 2009/2011 high of 3000. Rising 13-week Twiggs Momentum suggests a primary up-trend. Respect of support at 3000 is likely and follow-through above 3100 would confirm an advance to 3500*.

Euro Stoxx 50

* Target calculation: 3000 + ( 3000 – 2500 ) = 3500

Europe tests key resistance levels

The monthly chart of the FTSE 100 is testing resistance at the 2007 high of 6750. Rising 13-week Twiggs Money Flow signals buying pressure. Breakout above 6750 would test the 1999/2000 high at 7000*. Respect of resistance (reversal below 6650) is unlikely, but would warn of a correction to primary support.

FTSE 100

* Target calculation: 6700 + ( 6700 – 6400 ) = 7000

Germany’s DAX found short-term resistance at 9000, but rising 13-week Twiggs Money Flow again signals buying pressure. Target for the current advance is 9300*. Reversal below 8500 is most unlikely, but would warn of a correction to the primary trendline around 8000.

DAX

* Target calculation: 8500 + ( 8500 – 7700 ) = 9300

Dax Volatility remains low, indicating bullish sentiment.

DAX

Dow Jones Euro Stoxx 50 is retracing to test support at its 2009/2011 high of 3050. Rising 13-week Twiggs Momentum continues to suggest a healthy up-trend. Respect of support at 3000 would signal another advance — a bullish sign for the European economy.

Euro Stoxx 50

* Target calculation: 2850 + ( 2850 – 2500 ) = 3200

Transport: Fedex improving outlook

Bellwether transport stock Fedex has risen dramatically in recent weeks, reflecting the improving outlook for economic activity.
Fedex

UPS has enjoyed a similar surge, as has Deutsche Post AG (which owns DHL).

Deutsche Post AG

Forex: Euro & Aussie test support

The Euro is retracing to test the new support level at its February high of $1.37. Respect of the rising trendline would confirm a long-term advance to $1.46*. Troughs above zero on 13-week Twiggs Momentum indicate a healthy up-trend. Reversal below the trendline is unlikely, but would warn of a correction to the primary trendline and support at $1.31.

Euro/USD

* Target calculation: 1.37 + ( 1.37 – 1.28 ) = 1.46

Sterling broke medium-term support at €1.175, signaling a correction to test primary support at €1.14. Reversal of 13-week Twiggs Momentum below zero strengthens the warning. Recovery above resistance at €1.19 is unlikely, but would suggest an advance to €1.24*.

Sterling/Euro

* Target calculation: 1.19 + ( 1.19 – 1.14 ) = 1.24

A higher trough on the Greenback against the Yen suggests buying pressure. Breakout above ¥99 would strengthen the signal, offering a target of ¥101. 21-Day Twiggs Momentum appears to have leveled out and a trough above zero would indicate a primary up-trend. Reversal below support at ¥97 is unlikely, but would test primary support at ¥96.

USD/JPY

Canada’s Loonie retreated below support at $0.96 against its US neighbor. Breach of primary support at $0.9450 would signal continuation of the primary down-trend, as would another 13-week Twiggs Momentum peak below zero. Recovery above $0.96 is unlikely, but would warn of a trend reversal.

Canadian Loonie

The Aussie Dollar retraced to test medium-term support at $0.95* against the Greenback. Recovery above $0.9550 is likely and would indicate a test of parity*. Two doji candles suggest support and follow-through below $0.9450 is unlikely, indicating a fall to $0.93.

Aussie Dollar

* Target calculation: 0.975 + ( 0.975 – 0.95 ) = 1.00

The Aussie encountered resistance at $1.16 against its Kiwi neighbour, suggesting a test of medium-term support at $1.14. Respect of $1.14 would be bullish and breakout above $1.16 would complete a double-bottom reversal with a target of $1.20*. Failure of $1.14 is now unlikely, but would threaten primary support at $1.12.

Kiwi Dollar

* Target calculations: 1.16 + ( 1.16 – 1.12 ) = 1.20

Footsie breakout while Europe hesitates

The FTSE 100 broke resistance at 6700, indicating an advance to 7000*. Rising 13-week Twiggs Money Flow signals buying pressure. Reversal below 6600 is unlikely, but would test primary support at 6400.

FTSE 100

* Target calculation: 6700 + ( 6700 – 6400 ) = 7000

Dow Jones Euro Stoxx 50 hesitated with a doji star above long-term resistance at 3000. Expect a test of the new support level, but rising 13-week Twiggs Momentum continues to suggest a healthy up-trend. Penetration of the secondary trendline would warn of a correction to the primary trendline — around 2750.

Euro Stoxx 50

* Target calculation: 3000 + ( 3000 – 2500 ) = 3500

Spain’s Madrid General Index warns of a correction, with an evening star accompanied by strong volume. The sharp fall on 13-week Twiggs Money Flow indicates short-term selling pressure. Respect of the rising trendline would confirm the primary up-trend, offering a target of 1050*. Reversal below 900 is unlikely, but would indicate the up-trend is weakening.

Madrid General Index

* Target calculation: 900 + ( 900 – 750 ) = 1050

Germany’s DAX, however, is a lot more bullish. Respect of the new support level at 8500 offers a medium-term target of 9300*. Reversal below 8500 is now unlikely, but would warn of a correction to the primary trendline at 8000.

DAX

* Target calculation: 8500 + ( 8500 – 7700 ) = 9300