Category: UK & Europe

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Forex: Euro breakout, Aussie strengthens

The Euro broke through its February high of $1.37, signaling a long-term advance to $1.46*. Troughs above zero on 13-week Twiggs Momentum indicate a healthy up-trend, but expect retracement to test the new support level. Reversal below support at $1.34 is unlikely, but would warn of another correction.

Euro/USD

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

Sterling is testing medium-term support at €1.175. Penetration of the rising trendline warns the trend is weakening and failure of support would signal a correction to primary support at €1.14. Reversal of 13-week Twiggs Momentum below zero strengthens the warning. Recovery above resistance at €1.20 is unlikely, but would signal an advance to €1.225*.

Sterling/Euro

* Target calculation: 1.20 + ( 1.20 – 1.175 ) = 1.225

The greenback is pretty directionless against the Japanese Yen, reflecting indecision. Declining 13-week Twiggs Momentum warns of trend weakness. Breakout above ¥101 would signal another advance, while breach of support at ¥96 would indicate a reversal.

USD/JPY

Canada’s Loonie is back at parity against the Aussie Dollar. Expect some support at this level. A breach of the descending trendline would alert us to a potential rally, as would reversal of 13-week Twiggs Momentum above zero.

Canadian Loonie

The Aussie Dollar encountered resistance at its target of $0.97* against the greenback. Short retracement would indicate strong momentum, while respect of the new support level at $0.95 would suggest a healthy up-trend. Failure of support is unlikely, but would warn the up-trend is weakening.

Aussie Dollar

* Target calculation: 0.95 + ( 0.95 – 0.93 ) = 0.97

The Aussie Dollar is strengthening against its Kiwi neighbour, breaking resistance at $1.14 to signal another test of $1.16. Bullish divergence on 13-week Twiggs Momentum favors a primary up-trend. Breakout above $1.16 would complete a double-bottom reversal with a target of $1.20*. Reversal below $1.14 is now unlikely, but would warn of another decline; confirmed if primary support at $1.12 is broken.

Kiwi Dollar

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

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The EU should take inspiration from Switzerland in its attempts to increase democratic legitimacy | EUROPP

Joseph Lacey explains why the EU should follow the Swiss example:

Three major factors help to explain how Switzerland is possible. First, there are national elections and nationally-held referendums connected to the workings of a national government. Second, though national elections only take place every five years, referendums are far more frequent. On average, usually on three scheduled dates, Switzerland holds seven referendums annually. Some of these are constitutionally mandated, though the majority are demanded at the initiative of at least 100,000 citizen signatures. Third, unlike the case of Belgium where national consciousness is fragmented by two party systems divided along linguistic lines (French and Flemish), Switzerland has a single party system where the dominant cleavage is ideological, cutting across linguistic barriers and thereby allowing parties to draw common support from all public spheres.

Read more at The EU should take inspiration from Switzerland in its attempts to increase democratic legitimacy. | EUROPP.

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European breakout

Dow Jones Euro Stoxx 50 — representing 50 leading stocks in the Eurozone — broke long-term resistance at 3000, while the 13-week Twiggs Momentum trough above zero suggests a healthy up-trend. Expect retracement to test the new support level; respect would signal a primary advance, while failure would test 2850, warning of a bull trap.

Euro Stoxx 50

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

The FTSE 100 is also strengthening, with rising 13-week Twiggs Money Flow indicating buying pressure. Breakout above 6700 would indicate an advance to 7000*. Reversal below support at 6400 is unlikely, but would warn of a primary down-trend.

FTSE 100

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

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Forex: Aussie breakout

The Euro is consolidating in a narrow band below $1.36. Upward breakout above $1.37 would signal a fresh advance, with a long-term target of $1.47*. The trough above zero on 13-week Twiggs Momentum indicates a healthy up-trend. Failure of support at $1.34 — and penetration of the rising trendline — is unlikely, but would warn of another correction.

Euro/USD

* Target calculation: 1.37 + ( 1.37 – 1.27 ) = 1.47

Sterling broke short-term support at €1.18, warning of another correction to primary support at €1.14. Recovery of 13-week Twiggs Momentum above zero continues to favor a primary up-trend. Breakout above resistance at €1.20 is unlikely, but would signal an advance to €1.24*.

Sterling/Euro

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

The greenback respected support against the Japanese Yen at ¥96. Breakout above ¥101 would signal another advance. Declining 13-week Twiggs Momentum, however, continues to warn of a weak up-trend and breach of support at ¥96 would indicate a reversal.

USD/JPY

* Target calculation: 96 – ( 100 – 96 ) = 92

Canada’s Loonie respected support at $0.96, suggesting another attempt at resistance of $0.9750. Breakout would complete a double-bottom reversal with a target of parity*. Bullish divergence on 13-week Twiggs Momentum also favors a primary up-trend. Reversal below $0.96 is unlikely, but would signal another test of the primary level at $0.9450.

Canadian Loonie

* Target calculation: 97.5 + ( 97.5 – 94.5 ) = 100.5

The Aussie Dollar broke through resistance at $0.95, signaling an advance to $0.97*. Retracement to test the new support level at $0.95 is likely. Respect would confirm the primary advance; failure of support — though unlikely — would warn of another test of $0.93.

Aussie Dollar

* Target calculation: 0.95 + ( 0.95 – 0.93 ) = 0.97

Against its Kiwi neighbour, the Aussie Dollar respected resistance at $1.14, suggesting another test of primary support at $1.12. Bullish divergence on 13-week Twiggs Momentum, however, continues to favor a primary up-trend. Recovery above $1.14 — and the descending trendline — would signal a test of primary resistance at $1.16. Breakout above $1.16 would complete a double-bottom reversal with a target of $1.20*. Until then, breach of primary support remains a threat and would warn of a decline to $1.08*.

Kiwi Dollar

* Target calculations: 1.12 – ( 1.16 – 1.12 ) = 1.08

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Europe on the rise

Dow Jones Euro Stoxx 50 — representing 50 leading stocks in the Eurozone — is advancing strongly, with a 13-week Twiggs Momentum trough above zero suggesting a healthy up-trend. Breakout above 2800 offers a target of 3200*. Reversal below 2850 is unlikely, but would warn of a correction to the long-term rising trendline.

Euro Stoxx 50

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

The FTSE 100 threatened a primary down-trend after breaching primary support at 6400, but this proved a false break and recovery above 6400 now suggests a rally to 6650/6700. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Breakout above 6700 would indicate an advance to 7000*, but reversal below support at 6400, while less likely, would warn of a correction to 6000.

FTSE 100

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

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Forex: Euro, Aussie up-trend

The Euro continues to test its new support level at $1.34/$1.3450. Respect is likely and would signal a test of the February high at $1.37. Breakout above $1.37 would offer a long-term target of $1.47*. A trough above zero on 13-week Twiggs Momentum indicates a healthy up-trend. Failure of support — and penetration of the rising trendline — is unlikely, but would warn of another correction.

Euro/USD

* Target calculation: 1.37 + ( 1.37 – 1.27 ) = 1.47

Sterling faltered after breaking resistance at €1.19. Reversal below €1.18 would warn of another test of primary support at €1.14. Follow-through above €1.20 is less likely, but would signal an advance to €1.24*.

Sterling/Euro

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

The greenback is testing primary support at ¥96 against the Yen. Reversal of 13-week Twiggs Momentum below zero would warn of a primary down-trend. Follow-through below ¥94 would confirm. Recovery above ¥101 is less likely, but would indicate another advance.

USD/JPY

* Target calculation: 96 – ( 100 – 96 ) = 92

Canada’s Loonie respected its descending trendline and is testing support at $0.96. Failure (of support) would signal another test of the primary level at $0.9450. Bullish divergence on 13-week Twiggs Momentum continues to favor a primary up-trend. Breakout above $0.9750 is presently unlikely, but would complete a double-bottom reversal with a target of parity*.

Canadian Loonie

* Target calculation: 97.5 + ( 97.5 – 94.5 ) = 100.5

The Aussie Dollar is retracing to test its new support level at $0.94 against the greenback. Respect would indicate a test of resistance at $0.95, but failure is as likely and would warn of another test of medium-term support at $0.93. Breach of $0.93 would be more serious, warning of a correction to primary support at $0.89.

Aussie Dollar

* Target calculations: 0.95 + ( 0.95 – 0.93 ) = 0.97

The Aussie continues to test primary support at $1.12 against its Kiwi neighbour. Recovery above $1.14 — and the descending trendline — would indicate a test of primary resistance at $1.16. Breakout above $1.16 would complete a double-bottom reversal with a target of $1.20*. Breach of primary support remains as likely, however, and would offer a target of $1.08*.

Kiwi Dollar

* Target calculations: 1.12 – ( 1.16 – 1.12 ) = 1.08

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FTSE breaks primary support

The FTSE 100 broke support at 6400, signaling a primary down-trend. Penetration of the rising trendline would strengthen the signal. Expect a test of the June low at 6000. Bearish divergence on 13-week Twiggs Money Flow highlights strong selling pressure; crossover to below zero would further strengthen the signal. Recovery above 6400 is unlikely, but would warn of a bear trap.

FTSE 100

Germany’s DAX is a lot more bullish, testing the new support level at 8500. Respect would offer a medium-term target of 9300*. Reversal below 8000 is unlikely, but would warn of another test of primary support at 7500/7600.

DAX

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

France’s CAC-40 is similarly testing new support at 4100. Recovery above its 2011 high of 4200 would offer a target of 4400*. Reversal below 3900 is unlikely but would warn of a test of primary support at 3600.

CAC-40

* Target calculation: 4000 + ( 4000 – 3600 ) = 4400

Spain’s Madrid General Index is even stronger, with no hint of retracement while 13-week Twiggs Money Flow indicates medium-term buying pressure. Retracement that respects support at 900 would confirm an advance to 1050*. Reversal below 900 is unlikely, but would warn of a correction.

Madrid General Index

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

Italy’s MIB Index broke through resistance at 17500/18000, signaling a primary advance to 20000*. Successive troughs above zero on 13-week Twiggs Money Flow suggest a strong primary up-trend. Reversal below 17500 and the rising trendline is unlikely, but would warn of a bull trap.

MIB Index

* Target calculation: 17500 + ( 17500 – 15000 ) = 20000

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