Forex Archives - Page 43 of 59 - the patient investor

November 8, 2012

The Gold-Euro-Dollar conundrum

The Euro broke support at $1.28 against the greenback (weekly chart). Respect of the descending trendline warns of a down-swing to test primary support at $1.20. Reversal of 63-day Twiggs Momentum below zero would strengthen the signal. But the Dollar Index and Gold suggest the opposite. Recovery above $1.28 would indicate a bear trap.
Euro

The Dollar Index is inversely rising to test resistance at 81/81.50. Breakout would indicate another test of 84.00 but 63-Day Twiggs Momentum below zero warns of a primary down-trend. Rising gold also suggests dollar weakness. Reversal below support at 78.50 would complete a head-and-shoulders reversal with a target of 74*.

US Dollar Index

* Target calculation: 79 – ( 84 – 79 ) = 74

Spot gold (daily chart) broke resistance at $1725 per ounce, signaling an advance to $1900*. The 63-day Twiggs Momentum trough above zero indicates a primary up-trend. Breakout above $1800 would confirm. The conundrum is the euro is weakening and dollar index strengthening but gold is rising rather than weakening as expected.

Spot Gold

* Target calculation: 1800 + ( 1800 – 1700 ) = 1900

The DJ-UBS Commodity Index (weekly chart) found support at 140. 63-Day Twiggs Momentum is testing zero. Respect would indicate a primary up-trend. Recovery above $1.52 would confirm. Breach of $140, however, and 63-day Twiggs Momentum below zero, resulting from a strengthening dollar and/or global down-turn, would test primary support at 126.

DJ-UBS Commodity Index

Nymex WTI Light Crude is headed for a test of primary support at $76/$78 per barrel. Declining 63-day Twiggs Momentum, below zero, warns of a primary down-trend. Brent Crude is also weakening, headed for test of primary support at $90.

Nymex WTI Light Crude

Colin Twiggs

Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.

November 8, 2012

Dollar Index

The Dollar Index is testing resistance at 81/81.50. Breakout would indicate another test of 84.00. But 63-day Twiggs Momentum below zero warns of a primary down-trend. Breach of support at 78.50 would complete a head-and-shoulders reversal with a target of 74*.

US Dollar Index

* Target calculation: 79 – ( 84 – 79 ) = 74

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

November 6, 2012

Forex: Euro, Pound Sterling, Australian Dollar and Canadian Loonie

The Euro is testing support at $1.28. Breakout would respect the primary down-trend, warning of another test of primary support at the 2010 low at $1.19/1.20. Reversal of 63-day Twiggs Momentum below zero would strengthen the signal. Recovery above $1.32 is less likely but would indicate an advance to $1.35/$1.36*.

Euro/USD

Pound Sterling rallied off support at €1.225 against the Euro. Breakout above €1.26 would indicate an advance to €1.29. A 63-day Twiggs Momentum trough above zero — and respect of the rising trendline — would both indicate a healthy up-trend. Breach of support at €1.225, however, would signal a primary down-trend.

Pound Sterling/Euro

* Target calculation: 1.26 + ( 1.26 – 1.23 ) = 1.29

Canada’s Loonie is testing support at parity against the greenback. Respect would indicate an advance to $1.06*. Breach of resistance at $1.03 would strengthen the signal and a 63-day Twiggs Momentum trough above zero would confirm. Failure of support, however, would warn of another test of primary support at $0.96.

Canadian Loonie/Aussie Dollar

* Target calculation: 1.03 + ( 1.03 – 1.00 ) = 1.06

The Aussie Dollar broke resistance at $1.04 after the RBA announced that it would not cut interest rates, leaving them on hold until December. Expect an advance to $1.06*. 63-Day Twiggs Momentum oscillating above zero suggests a primary up-trend.

Aussie Dollar/USD

* Target calculation: 1.04 + ( 1.04 – 1.02 ) = 1.06

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

October 31, 2012

Gold and dollar test support

The Dollar Index (daily chart) broke medium-term resistance at 80 before retracing to test the new support level. Penetration of the descending trendline indicates the correction has ended. A long tail on Wednesday indicates (short-term) buying pressure; respect of support would signal an advance to 81. But the primary trend is downward — reflected 63-day Twiggs Momentum oscillating below zero — and breach of support at 79 would signal a decline to 75*.

US Dollar Index

* Target calculation: 78 – ( 81 – 78 ) = 75

Still on the daily chart, spot gold found short-term support at 1700, penetrating the descending trendline. A stronger dollar would suggest further gold weakness but the $DXY primary trend remains down. Expect another test of $1700 but respect would signal a rally to $1800 per ounce*. A 63-day Twiggs Momentum trough above zero would signal a primary up-trend, while breakout above $1800 would confirm.

Spot Gold

* Target calculation: 1650 + ( 1650 – 1500 ) = 1800

The DJ-UBS Commodity Index (weekly chart) reflects an easing inflation outlook, breach of medium-term support at 145 signaling a correction. A 63-day Twiggs Momentum trough above zero would suggest a primary up-trend, while a fall below zero would mean further weakness.

DJ-UBS Commodity Index

Brent Crude (weekly chart) is testing support at $108 per barrel. Breakout would indicate a decline to $100. Reversal of 63-day Twiggs Momentum below zero would strengthen the bear signal.

ICE Brent Crude Afternoon Markers

* Target calculation: 108 – ( 117 – 108 ) = 99

Nymex WTI Light Crude is falling faster, headed for a test of primary support at $76/$78 per barrel. A 63-day Twiggs Momentum peak below zero warns of a primary down-trend.

Nymex WTI Light Crude

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

October 29, 2012

Here Comes the Dollar Wave Again | WSJ.com

Wall Street Journal opinion on the impact of QE3 on Asia:

If Asia stays true to form, the world is in for a bout of foreign-exchange interventions — some coordinated, some not — in a quest for stability. Yet these interventions will only encourage greater speculative flows, as some investors start betting on the next policy move. This would be America’s problem, too, given the growing number of American businesses trading with Asia that will grapple with a chaotic exchange-rate system…….

via Review & Outlook: Here Comes the Dollar Wave Again – WSJ.com.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

October 25, 2012

Forex: Aussie Dollar, Euro, Pound Sterling and Canada's Loonie

The Aussie Dollar (daily chart) is headed for another test of resistance at $1.04 against the greenback. A 63-day Twiggs Momentum trough above zero suggests a primary up-trend. Breakout above $1.04 would offer a target of $1.06*.

Aussie Dollar/USD

* Target calculation: 1.04 + ( 1.04 – 1.02 ) = 1.06

The Euro (weekly chart) is testing resistance at $1.32. Recovery of 63-day Twiggs Momentum above zero suggests a primary up-trend. Breakout above $1.32 — and penetration of the descending trendline — would confirm, offering an immediate target of the 2012 high at $1.35.

Euro/USD

* Target calculation: 1.32 + ( 1.32 – 1.28 ) = 1.36

Pound Sterling (weekly) rallied off primary support at €1.225/€1.23 against the euro. Breach would complete a head and shoulders reversal with a target of $1.18*. Reversal of 63-day Twiggs Momentum below zero suggests a primary down-trend. Expect a test of resistance at $1.26 followed by another attempt at primary support.

Pound Sterling/Euro

* Target calculation: 1.23 – ( 1.28 – 1.23 ) = 1.18

Canada’s Loonie (daily) is consolidating between $1.00 and $1.01 (USD). Downward breakout — and penetration of the rising trendline — would warn of another test of primary support at $0.96. But 63-day Twiggs Momentum is bullish and a trough above zero would suggest an advance to the 2011 highs at $1.06.

Canadian Loonie/Aussie Dollar

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

October 24, 2012

Gold and commodities fall

The Dollar Index is consolidating between 79 and 80. Upward breakout would test resistance at 81.00/81.50 — penetration of the descending trendline indicating the correction has ended — but the primary trend is downward and breach of support at 79 would signal another decline. A 63-day Twiggs Momentum peak below zero would strengthen the bear signal.

US Dollar Index

* Target calculation: 79 – ( 81 – 79 ) = 77

Inflation expectations are easing, with spot gold undergoing a correction since breaking support at 1750. Expect short-term support at 1700 and penetration of the descending trendline would indicate another test of $1800 per ounce*. A 63-day Twiggs Momentum trough above zero is likely — and would signal a primary up-trend, while breakout above $1800 would confirm.

Spot Gold

* Target calculation: 1650 + ( 1650 – 1500 ) = 1800

The DJ-UBS Commodity Index also reflects an easing inflation outlook, breaking medium-term support at 145 to signal a correction. 63-Day Twiggs Momentum is unlikely to remain above zero but a shallow trough would be a bullish sign.

DJ-UBS Commodity Index

Brent Crude is also falling, having broken support at $108 per barrel. Expect a test of $100. Reversal of 63-day Twiggs Momentum below zero would strengthen the bear signal.

ICE Brent Crude Afternoon Markers

* Target calculation: 108 – ( 117 – 108 ) = 99

Nymex WTI Light Crude is similarly headed for a test of primary support at $76/$78 per barrel. The 63-day Twiggs Momentum peak below zero warns of a primary down-trend.

Nymex WTI Light Crude

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

October 18, 2012

Forex: Euro, Pound Sterling, Canadian Loonie and Aussie Dollar

The Euro rallied off support at $1.28 and is headed for resistance at $1.32. Recovery of 63-day Twiggs Momentum above zero suggests a primary up-trend. Breakout above $1.32 would confirm, offering an immediate target of the 2012 high at $1.35.

Euro/USD

* Target calculation: 1.32 + ( 1.32 – 1.28 ) = 1.36

Pound Sterling is testing primary support at €1.23 against the euro. Breach would signal a primary down-trend. Target for the completed head and shoulders reversal would be $1.18*. Reversal of 63-day Twiggs Momentum below zero would strengthen the signal.

Pound Sterling/Euro

* Target calculation: 1.23 – ( 1.28 – 1.23 ) = 1.18

Canada’s Loonie found strong support between $1.01 and $1.02 (USD). Breakout would indicate an advance to the 2011 highs at $1.06. Rising 63-day Twiggs Momentum strengthens the signal.

Canadian Loonie/Aussie Dollar

The Aussie Dollar found support at $1.02/$1.015 against the greenback. Expect another test of $1.06. 63-Day Twiggs Momentum troughs above zero indicate a primary up-trend. Breakout above $1.06 would offer a target of the 2011 high at $1.10*, though there is bound to be some resistance at $1.08.

Aussie Dollar/USD

* Target calculation: 1.06 + ( 1.06 – 1.02 ) = 1.10

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

October 12, 2012

Forex: Euro recovers, Aussie & Sterling weaken

The Euro is headed for another re-test of resistance at $1.32 and its descending trendline. Breakout would signal a primary up-trend. Recovery of 63-day Twiggs Momentum above zero strengthens the signal. Reversal below $1.26 is unlikely but would warn of another test of primary support at $1.20.

Euro/USD

* Target calculation: 1.275 + ( 1.275 – 1.20 ) = 1.35

Pound Sterling is testing support at €1.23 against the Euro. Breach of support — and the rising trendline — would warn the primary up-trend is ending. Retreat of 63-day Twiggs Momentum below zero would strengthen the signal.

Pound Sterling/Euro

Canada’s Loonie is testing support against the greenback at $1.02/$1.01. Respect of support — with recovery above $1.027 — would confirm the primary up-trend. A 63-day Twiggs Momentum trough above zero would strengthen the signal. Target for the advance is the 2011 high of $1.06.

Canadian Loonie/Aussie Dollar

* Target calculation: 1.04 +( 1.04 – 1.01 ) = 1.07

The Aussie Dollar found support at $1.02/$1.015 on the daily chart. Follow-through above $1.03 would suggest another test of $1.06. Failure of support is unlikely but would signal a primary down-trend. 63-Day Twiggs Momentum troughs above zero indicate continuation of the primary up-trend. Expect strong resistance at $1.06: the Aussie may be range-bound for some time.

Aussie Dollar/USD

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

October 11, 2012

Gold and commodities wait on the dollar

The Dollar Index rally recovered and is headed for a test of resistance at 81.00/81.50. Respect of resistance would confirm the primary down-trend. Reversal of 63-day Twiggs Momentum below zero also signals a primary down-trend; a peak below zero would strengthen the signal.

US Dollar Index

* Target calculation: 81 – ( 84 – 81 ) = 78

Gold and commodities await clear direction from the dollar which, in turn, is dependent on the inflation outlook. Spot Gold encountered strong resistance at $1800 per ounce*. A 63-day Twiggs Momentum trough above zero would signal a primary up-trend, while breakout above $1800 would confirm. Reversal below $1740 is unlikely but would warn of another correction.

Spot Gold

* Target calculation: 1650 + ( 1650 – 1500 ) = 1800

The RJ-CRB Commodities Index has been de-listed so I am now using the DJ-UBS Commodity Index, which retraced to test support at 145/146. Respect would indicate another test of resistance at 150/152 — as suggested by recovery of 63-day Twiggs Momentum above zero — while failure would warn of another test of primary support at 125.

DJ-UBS Commodity Index

Brent Crude rallied off support at $108 per barrel and is headed for another test of $117. Breakout would advance to the 2012 high of $125/$126. The small 63-day Twiggs Momentum trough above zero suggests a primary up-trend.

ICE Brent Crude Afternoon Markers

* Target calculation: 117 + ( 117 – 108 ) = 126

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.