UK & Europe Archives - Page 37 of 88

July 25, 2013

Forex: Euro strengthens, Loonie and Aussie weaken

The Euro continues to test medium-term resistance at $1.32. Respect of primary support at $1.27 is likely, following bullish divergence on 13-week Twiggs Momentum. Breakout above $1.32 would strengthen the signal, while follow-through above $1.37 would confirm a fresh advance, offering a target of $1.50. Reversal below $1.27 is unlikely, but would warn of a primary down-trend.

Euro/USD

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

The greenback continues to test resistance at ¥100 against the Yen. Follow-through above ¥101.50 would suggest a new advance, while breakout above ¥104 would confirm, offering a target of ¥114*. Reversal below ¥98.50 is unlikely, but would warn of a test primary support at ¥94.

USD/JPY

* Target calculation: 104 + ( 104 – 94 ) = 114

Canada’s Loonie respected support at $0.94, suggesting a rally to test resistance at parity against the greenback. The monthly chart displays long-term selling pressure, however, and another test of primary support at $0.94 is likely. Breakout would warn offer a target of $0.84*. Declining 13-week Twiggs Momentum already suggests a primary down-trend.

Canadian Loonie

* Target calculation: 0.94 – ( 1.04 – 0.94 ) = 0.84

A monthly chart of the Aussie Dollar displays a similar pattern against the greenback, with a broad top followed by breakout below primary support at $0.95. Support at $0.90 provides temporary respite, but the long-term target is $0.80*. Again, declining 13-week Twiggs Momentum indicates a primary down-trend.

Aussie Dollar

* Target calculation: 0.95 – ( 1.10 – 0.95 ) = 0.80

The Aussie/Kiwi cross has exceeded its target of $1.15*, steady decline on the weekly chart reflecting the impact of falling commodity prices. Breakout above the descending trendline would indicate a rally to test resistance at $1.21, but that seems a way off with the decline in 13-week Twiggs Momentum accelerating.

Aussie/Kiwi Dollar

* Target calculation: 1.21 – ( 1.27 – 1.21 ) = 1.15

July 22, 2013

Europe: DAX and FTSE 100 recovery

Germany’s DAX recovered above its 2007/2008 high at 8200, signaling a primary advance with a long-term target of 9500*. Breach of resistance at 8500 would confirm. 13-Week Twiggs Money Flow is above zero, but remains weak, warning of further retracement to test support at 8000. Reversal below 8000 is unlikely, but would warn of another test of the rising trendline around 7700.
DAX Index

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

The FTSE 100 is testing resistance at the 2008 high of 6750. Breakout would signal an advance to 7500*. Follow-through above the 1999/2000 high at 7000 would confirm. Respect of 6750 would indicate further consolidation above primary support at 6000.
FTSE 100 Index

* Target calculation: 6750 + ( 6750 – 6000 ) = 7500

Italy’s MIB Index respected primary support at 15000. Breakout above resistance at 16000 indicates another test of 17500. Repeated troughs above zero on 13-Week Twiggs Money Flow suggest a healthy up-trend.

Spain’s Madrid General Index displays a weaker retracement above long-term support at 760, while 13-Week Twiggs Money Flow below zero indicates selling pressure. Breakout below 760 would warn of a test of the 2012 low at 600. Respect of support, however, would indicate another rally to 880* — especially if accompanied by breakout above 820 or 13-week TMF recovery above zero.
Madrid General Index

* Target calculation: 820 + ( 820 – 760 ) = 880

July 21, 2013

Forex: Euro rallies, Yen weakens, Aussie consolidates

The Euro continues to test medium-term resistance at $1.32 on the weekly chart. Breakout above $1.32 would suggest a primary advance, with a target of $1.40* — confirmed if resistance at $1.34 is broken. But oscillation of 63-day Twiggs Momentum around zero does not indicate a strong trend and respect of resistance remains as likely.

Euro/USD

* Target calculation: 1.34 + ( 1.34 – 1.28 ) = 1.40

The greenback recovered above long-term support at ¥100 against the Yen, indicating continuation of the advance, with a target of ¥114*. Follow-through above ¥101.50 would confirm. Reversal below ¥100 is unlikely, but would warn of a test primary support at ¥94; confirmed if support at ¥98.50 is broken.

USD/JPY

* Target calculation: 104 + ( 104 – 94 ) = 114

Canada’s Loonie broke resistance at $0.96, suggesting a rally to the descending trendline and resistance at $0.98 against the greenback. Reversal below $0.96, however, would warn of another test of support at $0.9450. 63-Day Twiggs Momentum declining while below zero reflects a healthy primary down-trend.

Canadian Loonie

The Aussie Dollar is consolidating below medium-term resistance at $0.93 against the greenback. Breakout would signal a rally to the primary trendline at $0.96. But the primary trend remains downward and respect of $0.93 would re-test $0.90. The long-term target remains at $0.80* against the greenback. The RBA favors a softer dollar to cushion the impact of falling commodity prices.

Aussie Dollar

* Target calculation: 0.95 – ( 1.10 – 0.95 ) = 0.80

The impact of the declining resources sector is reflected in the primary down-trend on the Aussie/New Zealand Dollar cross. AUDNZD is approaching its target of $1.15 and breakout above the descending trendline would indicate a rally to test resistance at $1.21. But respect of $1.21 would be likely, suggesting another downward leg on the Aussie/Kiwi cross.

Aussie Dollar

* Target calculation: 1.21 – ( 1.27 – 1.21 ) = 1.15

July 15, 2013

FTSE hesitates while DAX gaps ahead

Dow Jones Europe Index is ranging between 270 and 290 on the weekly chart, indicating a weak advance after earlier breaking long-term resistance at 265. Breakout above 290 would signal continuation, but reversal below 270 remains as likely and would warn of a reversal; confirmed if the index follows-through below 265.
Dow Jones Europe Index
The FTSE 100 broke resistance at 6500 (from the March 2013 peak), indicating an advance to 6900. But tall shadows (or candlewicks) on Thursday and Friday warn of short-term selling pressure and reversal of 21-day Twiggs Money Flow below zero strengthens the signal. Breach of support at 6400 would warn of another test of primary support at 6000.
FTSE 100 Index

* Target calculation: 7000 + ( 7000 – 6000 ) = 8000

Germany’s DAX gapped above the declining trendline, signaling another primary advance, with a target of 9300*. Breach of resistance at 8500 would confirm. Recovery of 21-day Twiggs Money Flow above zero indicates medium-term buying pressure. Reversal below 8000 is unlikely, but would warn of another test of 7700.
DAX Index

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

July 11, 2013

Forex: Dollar falls sharply against Euro, Aussie, Loonie and Yen

The dollar fell sharply against the Euro and Sterling. The Euro jumped from primary support at $1.28 to medium-term resistance at $1.32. Breakout above $1.32 would suggest a primary advance, with a target of $1.40* — confirmed if resistance at $1.34 is broken. But oscillation of 63-day Twiggs Momentum around zero does not indicate a strong trend and respect of resistance is just as likely.

Euro/USD

* Target calculation: 1.34 + ( 1.34 – 1.28 ) = 1.40

Pound Sterling is weakening against the euro, breach of medium-term support at €1.16 suggesting a test of primary support at €1.1350 on the weekly chart. A 13-week Twiggs Momentum peak below zero would indicate a strong primary down-trend. Breach of primary support would offer a target of the 2011 low at €1.10.
Pound Sterling

The greenback retreated below support at ¥100 against the Yen. Recovery above ¥100 would indicate continuation of the advance, with a target of ¥114*. Respect of the new resistance level, however, remains as likely and would warn of a test primary support at ¥94.

USD/JPY

* Target calculation: 104 + ( 104 – 94 ) = 114

Canada’s Loonie broke resistance at $0.96, suggesting a rally to the descending trendline and resistance at $0.9850 against the greenback. Reversal below $0.96, however, would warn that all bets are off and another test of support at $0.9450 is likely. 63-Day Twiggs Momentum oscillating below zero indicates a healthy primary down-trend.

Canadian Loonie

The Aussie Dollar penetrated its secondary descending trendline, suggesting a rally to test the primary trendline at $0.96. But first we need a break of resistance at $0.93, while follow-through above $0.94 would strengthen the signal. Respect of resistance, however, would warn of another test of immediate support at $0.90, while the long-term target remains at $0.80* against the greenback. The RBA is not averse to this: they need a softer dollar to cushion the impact of falling commodity prices.

Aussie Dollar

* Target calculation: 0.95 – ( 1.10 – 0.95 ) = 0.80

July 9, 2013

NYSE Euronext to Take Over Libor | WSJ.com

Libor, the scandal-tarred benchmark that underpins interest rates on trillions of dollars in financial contracts, is being sold to NYSE Euronext, NYX -0.78% the U.S.-based company that runs the New York Stock Exchange. The deal, designed to restore Libor’s international credibility, was announced Tuesday by a British government commission and the NYSE.

From DAVID ENRICH and CASSELL BRYAN-LOW.

July 9, 2013

European rally follows US lead

The S&P 500 Index penetrated its descending trendline, indicating the correction has ended. Follow-through above 1650 would signal a primary advance to 1800*.

S&P 500 Index

* Target calculation: 1680 + ( 1680 – 1560 ) = 1800

The FTSE 100 broke through medium-term resistance at 6400, confirming the correction has ended, after earlier penetrating its descending trendline. Follow-through above 6500 (from the March 2013 peak) would strengthen the signal, indicating an advance to 6900. Recovery of 21-day Twiggs Money Flow above zero would also strengthen the signal. In the long term, breakout above 7000 would offer a target of 8000*.

FTSE 100 Index

* Target calculation: 7000 + ( 7000 – 6000 ) = 8000

Germany’s DAX is testing resistance at 8000. Breakout above that and the declining trendline would signal another primary advance, with a target of 9300*. Recovery of 21-day Twiggs Money Flow above zero would indicate medium-term buying pressure. Respect of resistance and reversal below 7700 is less likely, but would warn of a test of prmary support at 7400.
DAX Index

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

Italy’s MIB Index is consolidating below resistance at 16000. Penetration of the declining trendline suggests the correction is over. Breach of resistance would signal an advance to 18000. Recovery of 21-day Twiggs Money Flow above zero would strengthen the signal. Respect of resistance is unlikely, but would test primary support at 15000.
FTSE 100 Index

Spain’s Madrid General Index broke resistance at 800 and its descending trendline, indicating the correction is over. We still need to watch the weak 21-day Twiggs Money Flow: a peak below zero would indicate selling pressure, but recovery above zero would suggest a fresh advance. Respect of the new support level at 800 would confirm an advance to 870. Reversal below 800, while unlikely, would warn of another test of primary support at 750.
FTSE 100 Index

July 4, 2013

Surprise as BOE, ECB Give Forward Guidance | WSJ

New [BOE] governor Mark Carney has already made changes. In a statement accompanying the widely-expected decision to leave both rates and asset purchases unchanged, the BoE said that rising market rates had shifted expectations for the Bank Rate above levels that were justified by the economic situation.

The fact that there was a statement at all indicated a change in policy. The old BOE just announced its decision and left interpretation to the markets.

This was a clear attempt to talk the markets down and it worked.

July 3, 2013

Forex: Euro hesitant while Aussie falls

The euro is testing support at $1.30, representing a two-thirds retracement of the previous advance. Follow-through below $1.2950 would signal another test of primary support at $1.28 — and a ranging market — while respect of $1.30 would suggest a primary advance to $1.36*. Recovery of 63-day Twiggs Momentum above zero would be a bullish sign.

Euro/USD

* Target calculation: 1.30 + ( 1.34 – 1.28 ) = 1.36

Pound Sterling is ranging between €1.16 and €1.19 against the euro. Upward breakout — and penetration of the descending trendline — would signal a primary advance to €1.22*. But breach of support at €1.16 would indicate another test of primary support at €1.14, while a 13-week Twiggs Momentum peak below zero would suggest continuation of the primary down-trend.
Pound Sterling

The greenback retraced to test the new support level at ¥100 against the Yen. Respect, indicated by follow-through above ¥101, would re-test resistance at ¥103 to ¥104. But reversal below ¥99 seems as likely, and would re-test primary support at ¥94.

USD/JPY

* Target calculation: 104 + ( 104 – 94 ) = 114

Canada’s Loonie is testing support at $0.95 against the greenback. Follow-through below $0.9450 is likely and would signal another decline, with a target of $0.9350*. 63-Day Twiggs Momentum oscillating below zero indicates a strong primary down-trend.

Canadian Loonie

* Target calculation: 0.96 – ( 0.9850 – 0.96 ) = 0.9350

The Aussie Dollar continues to fall, with an immediate target of $0.90* and a long-term target of $0.80* against the greenback. The RBA is cheering this on as they need a softer dollar to cushion the impact of a down-turn in commodity prices.

Aussie Dollar

* Target calculation: 0.92 – ( 0.94 – 0.92 ) = 0.90; 0.95 – ( 1.10 – 0.95 ) = 0.80