UK & Europe Archives - Page 85 of 89

September 11, 2011

Good time to buy gold

With Europe awash with stories of the imminent default of Greece, and German banks told to prepare for a 50% haircut on Greek bonds [Bloomberg], this would be a good time to buy gold. Any rupture in current bailout arrangements would cause a flight to safety, driving Treasury yields even lower and gold even higher. Breakout above $1900 would confirm a fresh advance, with a target of 2100*.

AUDUSD

* Target calculation: 1900 + ( 1900 – 1700 ) = 2100

Added in response to question: Reversal below 1800 is unlikely but would warn that the ascending triangle formation has failed.

September 11, 2011

Europe on the Verge of a Political Breakdown – Barry Eichengreen – Project Syndicate

Europe doesn’t have months, much less years, to resolve its crisis. At this point, it has only days to avert the worst. It is critical that leaders distinguish what must be done now from what can be left for later.

The first urgent task is for Europe to bulletproof its banks. Doubts about their stability are at the center of the storm. It is no coincidence that bank stocks were hit hardest in the recent financial crash.

via Europe on the Verge of a Political Breakdown – Barry Eichengreen – Project Syndicate.

September 9, 2011

European stocks threaten breakout

DJ Europe Index ($E1DOW) reversed below 230, threatening another down-swing — with a target of 200. Twiggs Momentum oscillating below zero indicates a primary down-trend. Follow-through below 225 would confirm the bear signal.

DJ Europe

* Target calculation: 230 – ( 270 – 230 ) = 190

September 9, 2011

Euro breaks support at $1.40

The euro broke support at $1.40 after a descending triangle lasting several months. Breakout was most likely precipitated by the resignation of Jurgen Stark from the ECB. Target for the breakout is $1.30*.

EURUSD

* Target calculation: 1.40 – ( 1.50 – 1.40 ) = 1.30

September 9, 2011

ECB’s Top German Representative Resigns – WSJ.com

Germany’s top representative on the European Central Bank resigned in an apparent protest of the bank’s recent interventions in euro-zone debt markets…….Jürgen Stark is stepping down “for personal reasons,” the ECB said in a statement…… Mr. Stark, one of the ECB’s most outspoken anti-inflation “hawks,” had opposed the ECB’s decision last month to reactivate its government bond purchase program….

via ECB’s Top German Representative Resigns – WSJ.com.

September 8, 2011

GBP tests support

The Pound is testing support at $1.60/$1.59 against the greenback, dragged down by rising calls for another round of quantitative easing to assist the flagging UK economy. Failure of support would signal a primary down-trend with a target of $1.53*.

GBPUSD

* Target calculation: 1.60 – ( 1.67 – 1.60 ) = 1.53

September 8, 2011

Swiss Franc weakens on SNB action

The Swiss National Bank (SNB) threw a similar lifeline to Swiss exporters and tourist industry, pledging to support their currency at 1.20 Swiss Francs against the euro with “utmost determination” and to “buy foreign currency in unlimited quantities” to achieve this. [Bloomberg]

The euro jumped from 1.10 to 1.20 CHF on Tuesday and has been trading in a narrow range between 1.20 and 1.21 since then. Further speculation is inadvisable unless you have deep enough pockets to take on the SNB.

EURCHF

September 8, 2011

Euro tests support

Germany’s high court threw Chancellor Merkel a lifeline, ruling that bailouts of struggling euro-countries are legal in terms of the German constitution. But they also created an obstacle to further assistance, requiring that parliament vote on any future bailout decisions. [WSJ]

The euro continues to test support at $1.40 against the greenback. Failure would signal a primary down-trend with a target of $1.30*.

EURUSD

* Target calculation: 1.40 – ( 1.50 – 1.40 ) = 1.30

September 7, 2011

Europe consolidates

Dow Jones Europe Index ($E1DOW) recovered above 230 and is expected to consolidate between 230 and 250. The bear market remains strong, with 13-week Twiggs Money Flow below zero indicating selling pressure. Reversal below 230 would test the 2010 low of 205, though the calculated target is lower*.

Dow Jones Europe Index $E1DOW

* Target calculation: 230 – ( 265 – 230 ) = 195

September 5, 2011

Euro tests primary support at $1.40

The euro broke its medium-term trendline against the dollar at [TX] and is headed for another test of primary support at $1.40. Failure of support would offer a target of $1.30*.

EURUSD

* Target calculation: 1.40 – ( 1.50 – 1.40 ) = 1.30