Forex Archives - Page 48 of 58 - the patient investor

May 9, 2012

Gold breaks support at $1600/ounce

Spot Gold broke its long-term rising trendline and support at $1600, warning of a primary down-trend. Reversal of 63-day Twiggs Momentum below zero strengthens the signal. Failure of primary support at $1500 would confirm, offering a target of $1200*. Recovery above $1600 would indicate all bets are off.

Spot Gold

* Target calculation: 1500 – (1800 – 1500) = 1200

The Gold Bugs Index, representing un-hedged gold stocks, has been suggesting a gold down-trend for some time.

Gold Bugs Index

The Dollar Index broke through resistance at 80 on the weekly chart and a 63-day Twiggs Momentum trough above zero indicates another rally. Expect a test of 82 in the next few weeks, mirrored by a weakening gold price.

US Dollar Index Weekly Chart

* Target calculation: 82 + ( 82 – 78 ) = 86

May 3, 2012

Forex: US Dollar/Yen

The US dollar is testing long-term support at ¥80. Failure would warn of weakness in the primary up-trend, while respect would indicate a primary advance to ¥90. 63-Day Twiggs Momentum holding above zero suggests continuation of the primary trend.

US Dollar/ Japanese Yen

* Target calculation: 85 + ( 85 – 80 ) = 90

May 3, 2012

Forex: Pound Sterling strengthens against Euro

The euro is headed for another test of support at $1.30. Failure would complete a small bearish descending triangle on the weekly chart. Breach of primary support at $1,26 would offer a long-term target of $1.17*. Respect of the zero line (from below) by 63-day Twiggs Momentum would strengthen the signal.

Euro

* Target calculation: 1.26 – ( 1.35 – 1.26 ) = 1.17

Pound Sterling is in a primary up-trend against the euro, as indicated by 63-day Twiggs Momentum above zero. Target for the current advance is €1.255*.

Pound Sterling

* Target calculation: 1.215 + ( 1.215 – 1.175 ) = 1.255

May 3, 2012

Forex: Australia, Canada and South Africa

The Australian dollar has tracked the CRB Commodities Index fairly closely since 2009. Weakening commodity prices warn that the Aussie is likely to follow.

CRB Commodities Index and Australian Dollar

Against the US dollar, the Aussie is headed for another test of support at $1.02. Reversal of 63-day Twiggs Momentum below zero warns of a primary down-trend. Failure of support at $1.02 would confirm this, offering an initial target of $0.99.

Australian Dollar

* Target calculation: 1.02 – ( 1.05 – 1.02 ) = 0.99

Canada’s Loonie is in a primary up-trend against the Aussie dollar — as signaled by the 63-day Twiggs Momentum cross to above zero. Breakout above $0.982 completes a bullish ascending triangle formation with a target of parity.

Canadian Dollar

* Target calculation: 0.98 + ( 0.98 – 0.96 ) = 1.00

The Aussie is also weakening against the South African Rand. Cross of 63-day Twiggs Momentum below zero warns of a primary down-trend. Failure of support at R7.90 would confirm, offering an initial target of R7.50*.

South African Rand

* Target calculation: 8.00 – ( 8.50 – 8.00 ) = 7.50

May 3, 2012

Gold and Dollar indicate uncertainty

Spot Gold continues its consolidation between $1600 and $1700 per ounce, while testing the long-term rising trendline. Recovery above $1700 would suggest another primary advance; confirmed if an inverted head and shoulders formation is completed by a rise above $1800. 63-Day Twiggs Momentum oscillating around zero indicates uncertainty, however, and failure of support at $1600 would warn of a long-term trend change and test the primary level at $1500.

Spot Gold

* Target calculation: 1800 + (1800 – 1600) = 2000; 1500 – (1800 – 1500) = 1200

The US Dollar Index reflects the inverse of gold, with a potential triple bottom threatening to end the long-term down-trend on the Monthly chart. 50-Week Twiggs Momentum is oscillating around the zero line, indicating uncertainty.

US Dollar Index Monthly Chart

On the weekly chart, the dollar has met strong resistance at 80 and reversal below support at 78 would warn of another test of the 2011 low at 73. Reversal of 63-day Twiggs Momentum below zero would strengthen the bear signal.

US Dollar Index Weekly Chart

* Target calculation: 82 + ( 82 – 78 ) = 86; 78 – ( 82 – 78 ) = 74

April 26, 2012

Forex: Japanese Yen

The greenback is consolidating between ¥80 and ¥82 against the Japanese Yen. Recovery above ¥82 would indicate a fresh primary advance, with a target of ¥90*. Respect of zero by 63-day Twiggs Momentum would confirm a strong primary up-trend.

USD/Japanese Yen

* Target calculation: 85 + ( 85 – 80 ) = 90

April 26, 2012

Forex: Euro and Pound Sterling

The euro continues to test medium-term support at $1.30. With the dollar currently “the best horse in the glue factory”, support is likely to fail, signaling a re-test of the primary level at $1.26. A 63-day Twiggs Momentum peak below zero would indicate continuation of the primary down-trend; failure of primary support would confirm.

Euro

* Target calculation: 1.26 – ( 1.35 – 1.26 ) = 1.17

Sterling is testing resistance at $1.62. Recovery of 63-day Twiggs Momentum above zero indicates a primary advance, but news that the UK has dipped back into recession may inhibit further gains. Reversal below the rising trendline would warn of another test of primary support at $1.53, while breakout above $1.62 would signal an advance to the 2011 high of $1.67.

Pound Sterling

April 26, 2012

Forex: Canada's Loonie breaks out

The Loonie broke through resistance at $1.01 against the greenback, indicating an advance to the 2011 high of $1.06. This confirms the earlier signal when 63-day Twiggs Momentum recovered above zero.

Canadian Dollar/USD

* Target calculation: 1.01 + ( 1.01 – 0.96 ) = 1.06

April 26, 2012

Dollar and gold test key support levels

The Dollar Index continues to struggle with resistance at 80. Reversal below 78 would signal the end of the primary up-trend and a re-test of the 2011 low. Reversal of 63-day Twiggs Momentum below zero would strengthen the warning, while respect would indicate another primary advance.

US Dollar Index

* Target calculation: 82 + ( 82 – 78 ) = 86

Spot Gold failed to respond to the listless dollar, testing the long-term trendline and support at $1600/ounce. 63-Day Twiggs Momentum oscillating around the zero line indicates indecision. Recovery above $1700 would indicate a fresh primary advance, while failure of $1600 would warn of a primary down-trend — with a long-term target of $1200*.

Spot Gold

* Target calculation: 1800 + ( 1800 – 1600 ) = 2000; 1500 – ( 1800 – 1500 ) = 1200

April 19, 2012

Forex: Canadian Loonie and Aussie Dollar

Canada’s Loonie continues its narrow consolidation, having withstood falling crude oil prices over the last two weeks. 63-Day Twiggs Momentum holding above zero indicates a primary up-trend. Breakout above $1.01 would signal a primary advance to the 2011 high of $1.06*. Failure of support at $0.995 is less likely but would warn of a correction to primary support at $0.95.

Canadian Loonie

* Target calculation: 1.01 + ( 1.01 – 0.96 ) = 1.06

Weaker commodity prices are dragging the Aussie Dollar lower. On the weekly chart we can see the Aussie testing medium-term support at $1.02. Respect of the zero line by 63-day Twiggs Momentum suggest a strong up-trend. In the longer term, breakout above $1.085 would offer a target of $1.20*.

Aussie Dollar

* Target calculation: 1.08 + ( 1.08 – 0.96 ) = 1.20

On the daily chart, the Aussie Dollar is testing resistance at $1.045. Breach of its descending trendline indicates that the correction has weakened. Recovery above $1.045 would indicate the start of a fresh advance to test the 2012 high of $1.085.

Aussie Dollar

The Aussie Dollar is also retracing for another test of support against the South African Rand — at R7.90/R8.00. Momentum has fallen sharply and failure of support would warn of a correction to the long-term ascending trendline, around R7.50.

Aussie Dollar/South African Rand