Category: Forex

Coverage of all major currencies and the US Dollar Index.

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Forex: Aussie Dollar, Canadian Loonie and South African Rand

The Aussie and Canadian Dollar mirror the CRB Commodities Index, testing resistance at their long-term highs. The Aussie encountered resistance at $1.08. Breakout would confirm a primary up-trend — already signaled by 63-day Twiggs Momentum above zero.

Aussie Dollar

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

Canada’s Loonie is similarly testing resistance at $1.01. Breakout would offer a target of $1.06*.

Canadian Loonie

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

The South African Rand is fairing slightly better, with the Aussie testing medium-term support at R8.00. Failure would warn of a correction to the long-term rising trendline at R7.50.

South African Rand

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

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Forex: Europe and Japan

The Euro is in a primary down-trend despite the latest rally, headed for a test of the descending trendline. Expect retracement to test support at $1.32; breach of $1.30 would warn of another test of primary support (at $1.26).

Euro/US Dollar

* Target calculation: 1.32 – ( 1.42 – 1.32 ) = 1.22

Pound Sterling broke its descending trendline several weeks ago and is headed for a test of resistance at $1.62. Upward breakout is unlikely at present, but recovery of 63-day Twiggs Momentum above zero would be a bullish sign.

Pound Sterling/USD

The US Dollar is retracing to test the new support level after breaking long-term resistance at 80 Japanese Yen. Recovery of 63-day Twiggs Momentum above zero, after a long-term bullish divergence, indicates a primary up-trend. Expect a test of the 2011 high at ¥85.

US Dollar/Japanese Yen

* Target calculation: 80 + ( 80 – 75 ) = 85

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Gold encounters resistance as Dollar finds support

Spot gold ran into resistance at $1800/ounce and is testing medium-term support at $1700. Recovery of 63-day Twiggs momentum above zero signals a primary up-trend but we will not have confirmation until there is a clear break through $1800.
Spot Gold

* Target calculation: 1800 + ( 1800 – 1500 ) = 2100

The Dollar Index is conversely testing support at 78.00. 63-Day Twiggs Momentum may be slowing but the dollar remains in a primary up-trend. Respect of support would signal continuation — and weaker demand for gold.

US Dollar Index

* Target calculation: 80 + ( 80 – 75 ) = 85

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Aussie Dollar and Canada’s Loonie encounter resistance

The Aussie Dollar is testing short-term support at $1.06, the lower peak at $1.08 warning of selling pressure. Breach of the secondary rising trendline (and support at $1.06) would warn of a correction to the long-term trendline around $1.02. Recovery above $1.08, however, would signal a fresh primary advance with a long-term target of $1.20*.

Australian Dollar/US Dollar

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

Canada’s Loonie continues to consolidate below $1.01 on the weekly chart, while 63-day Twiggs Momentum crossed to above zero, indicating a primary up-trend. Breakout above $1.01 would confirm, offering an initial target of $1.06*.

Canadian Dollar/US Dollar

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

Both the Aussie and the Loonie are strongly influenced by commodity prices. If the CRB Commodities Index breaks resistance, expect both currencies to follow — though Canada will benefit more from higher oil prices.

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Gold tests $1800/ounce

Spot gold is testing resistance at $1800/ounce on the weekly chart after completing a small flag to signal continuation of the up-trend. Breakout would signal a primary advance to $2100*. Respect of the zero line by 63-day Twiggs Momentum would strengthen the signal.

Spot Gold

* Target calculation: 1800 + (1800 – 1500 ) = 2100

The US Dollar Index remains weak as inflation expectations rise. Failure of medium-term support at 78.50 would warn of trend weakness, while recovery above 80.00 would indicate trend strength. Target for a breakout above 81.50 would be 85.00*.

US Dollar Index

* Target calculation: 80 + ( 80 – 75 ) = 85

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Yen breaks 5-year trend

The US Dollar broke its 5-year down-trend against the Japanese Yen. Penetration of the descending trendline from 2007 indicates that a bottom is forming. Breakout above resistance at ¥80 would signal the start of a primary up-trend, with an initial target of ¥86, confirming the long-term bullish divergence on 63-day Twiggs Momentum.

US Dollar/Japanese Yen

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Forex: Euro slides on Greek turmoil

The euro retreated below $1.32 USD; failure of support at $1.30 would indicate another test of primary support at $1.26. And breakout below primary support would signal a decline to $1.20*.

Euro

* Target calculation: 1.26 – ( 1.32 – 1.26 ) = 1.20

Pound Sterling is retreating on the weekly chart. Respect of the zero line by 63-day Twiggs Momentum warns of another test of primary support at $1.53.

Pound Sterling

Canada’s Loonie respected resistance at $1.01 and is likely to re-test its rising trendline. Recovery above $1.01 is uncertain but would signal a primary up-trend.

Loonie

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

The Aussie Dollar similarly respected resistance at $1.08 and is likely to test medium-term support and the rising trendline at $1.04. Breakout above $1.08 would indicate a primary up-trend; confirmed if 63-day Momentum respects the zero line (from above).

Aussie Dollar

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

The US Dollar found support at R7.50 South African Rand. A rally that respects the descending trendline, however, would warn of continuation of the primary down-trend. Fall of 63-day Twiggs Momentum below zero would strengthen the bear signal.

US Dollar/South African Rand

The greenback is strengthening against the Japanese Yen. Breach of the descending trendline indicates that a bottom is forming. And breakout above ¥80 would signal the start of a primary up-trend — confirming the long-term bullish divergence on 63-day Twiggs Momentum.

Japanese Yen

* Target calculation: 80 + ( 80 – 76 ) = 84

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Gold hesitates on dollar strength

Spot gold displays a small flag consolidation, suggesting continuation of the advance to test $1800/ounce. Breach of the descending trendline indicates that the down-trend has ended and breakout above $1800 would signal an advance to $2100*. Respect of the zero line by 63-day Twiggs Momentum would strengthen the signal. A strengthening dollar, however, would weaken demand for gold.
Spot Gold

* Target calculation: 1800 + ( 1800 – 1500 ) = 2100

The US Dollar Index found support above 78. Recovery above 80 would indicate another test of resistance at 82. Rising 63-day Twiggs Momentum continues to signal a strong up-trend. Breakout above 82 would confirm the target of 85*.

US Dollar Index

* Target calculation: 80 + ( 80 – 75 ) = 85

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Forex: Euro weak while Aussie strengthens

The euro is testing resistance around $1.32 but the primary down-trend is strong. With 63-day Twiggs Momentum deep below zero, expect another test of primary support at $1.26. Breakout remains likely and would offer a target of $1.20*.

Euro/USD

* Target calculation: 1.26 – ( 1.32 – 1.26 ) = 1.20

The Aussie dollar has surged ahead of the CRB Commodities Index which it tracks quite closely. Breakout above $1.08 would signal a primary advance to $1.20*.

Australian Dollar/USD

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

Canada’s Loonie shows a similar pattern, testing resistance at $1.01. Breakout would offer a target of  $1.06*.

Canadian Dollar/USD

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

Pound Sterling followed through above the descending trendline, indicating that the primary down-trend is over. Recovery of 63-day Twiggs Momentum above zero would strengthen the signal. Only a breakout above 41.62, however, would signal the start of a primary up-trend.

Pound Sterling/USD


The greenback continues to test support at ¥76. Breakout would signal another decline, this time with a target of ¥72*. Long-term bullish divergence on 63-day Twiggs Momentum, however, indicates that the down-trend is slowing; breach of the descending trendline would strengthen the signal. Recovery above ¥80 would signal a primary up-trend.

USD/Japanese Yen

* Target calculation: 76 – ( 80 – 76 ) = 72

The South African Rand unexpectedly broke downwards from its bullish ascending triangle against the Aussie Dollar; follow-through below R8.00 would signal a correction to R7.50 (and the long-term trendline).

Australian Dollar/South African Rand

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Gold up-trend not yet confirmed

Spot gold is consolidating below resistance at $1800. Until we have a breakout there is no confirmation that gold has started a new up-trend. Reversal of 63-day Twiggs Momentum below zero would warn indicate weakness.

Spot Gold

* Target calculation: 1800 + ( 1800 -1500 ) = 2100

US Dollar Index continues to decline, boosting gold and commodities. Respect of the rising trendline would confirm the primary up-trend — as would a trough on 63-day Twiggs Momentum that finishes above the zero line.

US Dollar Index

* Target calculation: 80 + ( 80 – 75 ) = 85

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