Forex Archives - Page 30 of 58 - the patient investor

February 12, 2014

Firming Treasury yields support the Dollar

The yield on ten-year Treasury Notes recovered above resistance at 2.75 percent after penetrating the descending trendline, suggesting the correction is over. Follow-through (above say 2.80) would indicate another test of 3.00 percent. Bearish divergence on 13-week Twiggs Momentum, however, continues to warn of weakness. Breach of 2.50 is unlikely, but would offer a target of 2.00 percent*.

10-Year Treasury Yields

* Target calculation: 2.50 – ( 3.00 – 2.50 ) = 2.00

The Dollar Index continues to test resistance at 81.50. Breakout would signal a primary advance to 83.00*. Recovery of 13-week Twiggs Momentum above zero would strengthen the signal. Reversal below 79.70 is unlikely, but would warn of a primary down-trend — strengthened if support at 79.00 is broken.

Dollar Index

* Target calculation: 81.5 + ( 81.5 – 80 ) = 83

February 10, 2014

Japan: Dollar supports Nikkei

The US Dollar found support at ¥101 against the Yen. Recovery above the May high at ¥104 would suggest a healthy up-trend, while breakout above ¥106 would offer a target of ¥110*. Divergence on 13-week Twiggs Momentum remains bearish, but another trough above zero would reverse this. Breach of support at ¥101 now seems unlikely, but would warn of trend weakness.

Nikkei 225

* Target calculation: 106 + ( 106 – 102 ) = 110

A rising Dollar/Yen exchange rate would assist Japanese stocks. The Nikkei 225 found support at 14000 on the monthly chart. Recovery above 15000 would suggest another advance, while breakout above 16000 would confirm. Reversal of 13-week Twiggs Money Flow below zero, however, would warn of a primary down-trend.

Nikkei 225

February 10, 2014April 18, 2024

DAX finds support

The Euro retraced from resistance at $1.39 but appears unlikely to penetrate the rising trendline (having recently signaled a primary advance). Breach would warn of of trend weakness, but recovery above $1.39 is more likely and would signal an advance to $1.46*.

Euro

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

The dragonfly candlestick on Germany’s DAX indicates strong support at 9000. Recovery above 9400 would suggest the correction is over and breakout above 9800 would signal a fresh advance with a target of 10600*. Reversal below 9000 is unlikely, but would warn of a correction to the primary trendline. Completion of another 13-week Twiggs Money Flow trough high above zero would signal strong long-term buying pressure.

DAX

* Target calculation: 9800 + ( 9800 – 9000 ) = 10600

Retreat of DAX Volatility below 20 suggests low risk indicative of a bull market.

DAX

February 5, 2014

Interest Rates and the Dollar: Not much change

The yield on ten-year Treasury Notes is headed for a test of primary support at 2.50 percent after penetrating the rising trendline. Bearish divergence on 13-week twiggs Momentum strengthens the signal and reversal below zero would warn of a primary down-trend. Breach of 2.50 remains unlikely, but would offer a target of 2.00 percent*.

10-Year Treasury Yields

* Target calculation: 2.50 – ( 3.00 – 2.50 ) = 2.00

Despite falling yields, the Dollar Index is testing resistance at 81.50. Breakout would signal a primary advance to 83.00*. Recovery of 13-week Twiggs Momentum above zero would strengthen the signal. Reversal below 79.70 is less likely, but would warn of another test of support at 79.00.

Dollar Index

* Target calculation: 81.5 + ( 81.5 – 80 ) = 83

February 2, 2014

Japan: Nikkei falls as Dollar weakens

The US Dollar is testing support at ¥102 to ¥103 against the Yen. Breach of the rising trendline would strengthen the warning from a bearish divergence on 13-week Twiggs Momentum. Reversal of Momentum below zero would suggest a primary down-trend. Recovery above ¥104 is less likely, but would offer a target of ¥110*.

Nikkei 225

* Target calculation: 106 + ( 106 – 102 ) = 110

A rising Dollar/Yen exchange rate would assist Japanese stocks. The Nikkei 225 is testing support at 15000 after penetrating its rising trendline. Bearish divergence on 13-week Twiggs Money Flow warns of selling pressure. Reversal below 15000 would indicate a strong correction, while a Twiggs Money Flow cross below zero would warn of a primary down-trend.

Nikkei 225

January 29, 2014

US interest rates and the Dollar

The yield on ten-year Treasury Notes broke support at 2.75 percent after penetrating the rising trendline. Both warn of trend weakness. Bearish divergence on 13-week Twiggs Momentum strengthens the signal and reversal below zero would warn of a primary down-trend. Breach of support at 2.50 still seems unlikely, but would offer a target of 2.00 percent*.

10-Year Treasury Yields

* Target calculation: 2.50 – ( 3.00 – 2.50 ) = 2.00

The Dollar Index, on the other hand, appears headed for another test of resistance at 81.50. Breakout would signal a primary advance to 83.00*, while recovery of 13-week Twiggs Momentum above zero would strengthen the signal. Reversal below 79.80 cannot be ruled out, with long-term rates falling, and would warn of another test of primary support at 79.00.

Dollar Index

* Target calculation: 81.5 + ( 81.5 – 80 ) = 83

January 24, 2014

Aussie dive hurts ASX

The Australian Dollar is declining after breaking primary support at $0.885, offering a long-term target of 80 cents*. Exporters and import replacement industries on the ASX will benefit from the weaker Aussie Dollar in the long-term, but the short-term impact is negative, with overseas investors retreating from the market.

Australian Dollar/USD

* Target calculation: 0.885 – ( 0.97 – 0.885 ) = 0.80

The ASX 200 is heading for a test of support at 5200. Breach is likely and would signal a test of primary support at 5000. Declining 13-week Twiggs Money Flow indicates selling pressure. Recovery above 5400 is unlikely in the short-term, but would signal a primary advance, with a long-term target of 5800*.

ASX 200

* Target calculation: 5400 + ( 5400 – 5000 ) = 5800

January 22, 2014

Gold Bugs bullish

The Gold Bugs Index, representing un-hedged gold stocks, is often a leading indicator of spot prices. Bullish divergence on 13-week Twiggs Momentum suggests that a bottom is forming and is strengthened by breach of the descending trendline. Only recovery above 280 would signal reversal to a primary up-trend, but retracement that respects support at 190 would be a bullish indication.

Gold Bugs Index

Dollar Index

Rising interest rates and a stronger dollar, however, are likely to exert downward pressure on gold.

The yield on ten-year Treasury Notes respected resistance at 3.00 percent. Breach of support at 2.75 and the rising trendline would test primary support at 2.50, but failure of this level is unlikely. Breakout above 3.00 is more likely and would offer a target of 3.50 percent*.

10-Year Treasury Yields

* Target calculation: 3.00 + ( 3.00 – 2.50 ) = 3.50

The Dollar Index is again testing resistance at 81.50 after a bullish higher trough and breach of the descending trendline. Breakout would signal a primary advance to 83.00*, while recovery of 13-week Twiggs Momentum above zero would strengthen the signal. Respect of resistance is less likely, but reversal below 80 would warn of further weakness.

Dollar Index

* Target calculation: 81.5 + ( 81.5 – 80 ) = 83

Spot Gold

Spot gold respected long-term support at $1200/ounce and is testing resistance at $1260/ounce as well as the descending trendline. Respect would signal another test of $1200, while breakout above $1260 would suggest that a bottom is forming. Recovery of 13-week Twiggs Momentum above zero would strengthen the signal. Failure of $1200, however, would warn of a decline to 1000*.

Spot Gold

* Target calculation: 1200 – ( 1400 – 1200 ) = 1000

January 13, 2014

Gold hesitates in downward trend

The Gold Bugs Index, often a leading indicator of spot prices, is retracing to test the new resistance level at 210. Respect would confirm a decline to the 2008 low at 150. Recovery above 280 — and 13-week Twiggs Momentum crossover to above zero — would signal reversal to a primary up-trend, but that is unlikely at present.

Gold Bugs Index

Spot gold respected long-term support at $1200/ounce and follow-through above 1250 would suggest a bottom is forming. Recovery of 13-week Twiggs Momentum above zero would indicate a primary up-trend. Failure of $1200 is more likely, however, and would warn of a decline to 1000*.

Spot Gold

* Target calculation: 1200 – ( 1400 – 1200 ) = 1000

Dollar Index

Higher interest rates and a stronger dollar would increase downward pressure on gold.

The yield on ten-year Treasury Notes encountered strong resistance at 3.00 percent. Retracement is headed for a test of support at 2.75. Breach of that level would test primary support at 2.50, but reversal below 2.50 is unlikely. Breakout above 3.00 is more likely and would offer a target of 3.50 percent*.

10-Year Treasury Yields

* Target calculation: 3.00 + ( 3.00 – 2.50 ) = 3.50

The Dollar Index has twice respected resistance at 81.50 and we can expect another test of medium-term support at 79.80, but penetration of the declining trendline indicates downward momentum is fading. Respect of 79.80 would suggest another test of 81.50. Breakout above 81.50 would signal a primary advance, with recovery of 13-week Twiggs Momentum above zero strengthening the signal.

Dollar Index

* Target calculation: 81.5 + ( 81.5 – 79 ) = 84

December 19, 2013

Gold miners warn of weaker spot price

The Gold Bugs Index, often a leading indicator of spot prices, is headed for a test of the 2008 low at 150 after breaking support at 210. A 13-week Twiggs Momentum peak below zero suggests continuation of the primary down-trend.

Gold Bugs Index

The ASX Gold Index also signals another decline after breaking support at 2000. Retracement that respects the new resistance level would strengthen the signal.

ASX Gold Index

Spot gold has not yet broken support at $1200/ounce, but the metal is likely to follow the two miners indices. A 13-week Twiggs Momentum peak below zero would strengthen the signal. Breach of primary support would offer a target of $1000/ounce*.

Spot Gold

* Target calculation: 1200 – ( 1400 – 1200 ) = 1000

Dollar Index

Higher interest rates and a stronger dollar would increase downward pressure on gold.

The yield on ten-year Treasury Notes is headed for a test of 3.00 percent after breaking medium-term resistance at 2.75. Breakout would indicate a primary advance to 3.50 percent*. Reversal below the rising trendline is unlikely, but would warn of another test of 2.50. Higher yields are likely to strengthen the dollar.

10-Year Treasury Yields

* Target calculation: 3.00 + ( 3.00 – 2.50 ) = 3.50

The Dollar Index retraced to test medium-term resistance at 80.50. Breach of the declining trendline would suggest a rally to 81.50. Continuation of the decline is unlikely after Fed commencement of the taper and upward breakout above 81.50 would signal a primary advance. Recovery of 13-week Twiggs Momentum above zero would strengthen the signal.

Dollar Index

* Target calculation: 81.5 + ( 81.5 – 79 ) = 84