Category: Forex

Coverage of all major currencies and the US Dollar Index.

Posted on

ASX under pressure

The S&P 500 continues to test resistance at 2050, the upper bound of the broadening wedge. Rising 13-week Twiggs Money Flow suggests buying pressure. Breakout would offer a target of 2250*. Reversal below 2000 is less likely, but would warn of another correction.

S&P 500

* Target calculation: 2050 + ( 2050 – 1850 ) = 2250

The CBOE Volatility Index (VIX) indicates low risk typical of a bull market.

S&P 500 VIX

Dow Jones Euro Stoxx 50 is testing resistance at 3140. Breakout would indicate an advance to 3300. 13-Week Twiggs Money Flow oscillating around zero suggests indecision. Respect of 3140 would test primary support at 3000.

Dow Jones Euro Stoxx 50

The Shanghai Composite Index retraced to test support at 2440, while declining 13-week Twiggs Money Flow indicates medium-term selling pressure. Reversal below the rising trendline at 2400 would warn of a correction, while respect would suggest trend strength.

Shanghai Composite

Hong Kong’s Hang Seng Index is weaker. Reversal below 23000 would warn of a test of primary support at 21200/21500. Twiggs Money Flow (13-week) reversal below zero would also be a strong bear signal.

HSI

The ASX 200 is undergoing another correction. Respect of support at 5250/5300 would indicate reasonable trend strength, but declining 21-day Twiggs Money Flow suggests medium-term selling pressure. With both Energy and Metals & Mining sectors under pressure, a test of primary support at 5120/5150 is likely.

ASX 200

The Aussie Dollar is also falling, having reversed below primary support at $0.8650 to signal a decline to $0.80*.

Aussie Dollar

* Target calculation: 0.87 – ( 0.94 – 0.87 ) = 0.80

Posted on

Dollar rising, Treasury yields trend lower

The rally in ten-year Treasury Note yields continues. Expect resistance at 2.50% (the descending trendline). Respect would warn of another test of primary support at 2.00%. 13-Week Twiggs Momentum below zero continues to signal a primary down-trend.

10-Year Treasury Yields

* Target calculation: 2.30 – ( 2.60 – 2.30 ) = 2.00

A monthly chart of the Dollar Index places the current advance in its long-term context. Expect resistance at 88 to 90, with a possible correction to test support at 84. But the primary trend is up and breakout above 90 would offer a long-term target of 105. Rising 13-week Twiggs Momentum suggests a healthy (primary) up-trend. Failure of support at 84.50 is unlikely.

Dollar Index

* Target calculation: 84 + ( 84 – 79 ) = 89.00

Posted on

Aussie Dollar plunges

The Australian Dollar broke support at $0.8650, signaling a (primary) decline with a target of $0.80*. A 13-week Twiggs Momentum peak below zero strengthens the bear signal. Recovery above $0.8650 is most unlikely, but would warn of a bear trap.

AUDUSD

* Target calculation: 0.87 – ( 0.94 – 0.87 ) = 0.80

Posted on

Dollar rising as Treasury yields recover

The yield on ten-year Treasury Notes recovered above the former support level at 2.30%, suggesting another test of 2.50% and the descending trendline. Reversal below 2.30%, however, would warn of another test of primary support at 2.00%. 13-Week Twiggs Momentum below zero continues to signal a primary down-trend.

10-Year Treasury Yields

* Target calculation: 2.30 – ( 2.60 – 2.30 ) = 2.00

The Dollar Index respected its new support level at 84.50 and recovery above 86.5 would confirm a primary advance to 89*. Rising 13-week Twiggs Momentum suggests a healthy (primary) up-trend. Failure of support at 84.50 is unlikely, but would warn of correction to the primary trendline.

Dollar Index

* Target calculation: 84 + ( 84 – 79 ) = 89.00

Posted on

Russia’s Ruble in a world of pain

Russia’s ruble is in a world of pain, having lost one-third of its value against the Dollar over the last 40 months. The down-trend is accelerating, emphasized by two large 13-week Twiggs Momentum peaks below the zero line.

RUBUSD

Vladimir Putin has backed himself into a corner and has no way out but to escalate. His current strategy in Eastern Europe of one-step-back-two-steps-forward is becoming predictable and the European Union is likely to run out of patience, responding with further sanctions. Increasingly threatening behavior in the Baltic is also unlikely to intimidate, merely strengthening alliances and resolve.

George Soros on the Ukraine crisis:

https://twitter.com/andersostlund/status/525183504066560000

Former Swedish PM Carl Bildt seems to agree:

Ambrose Evans-Pritchard weighs in on Russia’s economic woes:

Posted on

Treasury yields fall and the Dollar finds support

The yield on ten-year Treasury Notes is in a primary down-trend (since breaking support at 2.50%). Expect retracement to test resistance at 2.30%. Respect is likely and would indicate another test of primary support at 2.00%*. A 13-week Twiggs Momentum peak below zero signals bear strength. Recovery above 2.30 is unlikely, but would test the descending trendline and resistance at 2.50%.

10-Year Treasury Yields

* Target calculation: 2.30 – ( 2.60 – 2.30 ) = 2.00

Inflation expectations are falling, with the 5-year inflation breakeven rate (5-year treasury yields minus the 5-year TIPS rate) now close to 1.4%.

5-Year Inflation Breakeven Rate

The Dollar Index respected its new support level at 84.50. Recovery above 86.5 would confirm a primary advance and a target of 89*. Rising 13-week Twiggs Momentum suggests a healthy (primary) up-trend. Failure of support at 84.50 is unlikely, but would warn of a correction to the primary trendline.

Dollar Index

* Target calculation: 84 + ( 84 – 79 ) = 89.00

Posted on

Aussie & Euro rally, but for how long?

The Aussie Dollar continues to pressure primary support at $0.8650. 13-Week Twiggs Momentum below zero indicates a primary down-trend. Respect of resistance at $0.89 would strengthen the signal. Breach of primary support would confirm, offering a target of the 2010 low at $0.80.

Aussie Dollar

* Target calculation: 87 – ( 94 – 87 ) = 80

The Euro retraced to test its new resistance at $1.28. Declining 13-week Twiggs Momentum (below zero) confirms a strong down-trend. Respect of resistance would warn of another decline, while breach of medium-term support at $1.25 would target the 2010/2011 lows of $1.20.

Euro/USD

* Target calculation: 1.28 – ( 1.40 – 1.28 ) = 1.16

Posted on

Treasury yields plunge

The yield on ten-year Treasury Notes broke primary support at 2.00%, plunging to a low of 1.86% in the morning before recovering to 2.10% at the close. Expect strong support at 2.00*. 13-Week Twiggs Momentum (below zero) has been warning of a primary down-trend for some time. Recovery above 2.30 is unlikely at present.

10-Year Treasury Yields

* Target calculation: 2.30 – ( 2.60 – 2.30 ) = 2.00

Falling inflation expectations are behind the drop, with the 5-year inflation breakeven rate — 5-year treasury yields minus the 5-year TIPS rate — making a new 2-year low.

5-Year Inflation Breakeven Rate

A falling dollar suggests that domestic purchases are driving the surge in Treasury prices, rather than international buyers. The Dollar Index is testing its new support level at 84.50. Respect would confirm a primary advance with a target of 89*. Rising 13-week Twiggs Momentum continues to indicate a healthy (primary) up-trend. Failure of support at 84.50 is unlikely, but breach of the secondary trendline would warn of a correction to the primary (trendline).

Dollar Index

* Target calculation: 84 + ( 84 – 79 ) = 89.00

Low interest rates strengthen demand for gold as they reduce the carrying cost.

Posted on

Dollar and interest outlook fall

The Dollar Index is retracing to test its new support level at 84.50. Respect would confirm a primary advance with a target of 89*. Rising 13-week Twiggs Momentum continues to indicate a healthy primary up-trend. Failure of support (84.50) is unlikely, but breach of the secondary trendline would warn of a correction to the primary line.

Dollar Index

* Target calculation: 84 + ( 84 – 79 ) = 89.00

The yield on ten-year Treasury Notes is again testing primary support at 2.30. Breach would signal a decline to 2.00*. A 13-week Twiggs Momentum peak below zero suggests a continued primary down-trend. Recovery above 2.65 is unlikely, but would indicate an advance to 3.00.

10-Year Treasury Yields

* Target calculation: 2.30 – ( 2.60 – 2.30 ) = 2.00

Low interest rates would weaken the Dollar and strengthen demand for gold.

Posted on

Dollar retraces

The Dollar Index is retracing to test its new support level at 84.50. Respect would confirm a primary advance with a target of 89*. Rising 13-week Twiggs Momentum indicates a healthy primary up-trend. Failure of support is unlikely, but would warn of a correction to the primary trendline.

Dollar Index

* Target calculation: 84 + ( 84 – 79 ) = 89.00

Powered by WordPress / WordPress Maintenance Service By Website Helper