Coverage of all major currencies and the US Dollar Index.
The Aussie dollar recovered above parity, breach of the declining trendline indicating that the correction is over. Breakout of the CRB Commodities Index above 325 would be a bullish sign, suggesting another test of $1.08 against the greenback. Breakout above $1.08 remains unlikely, but would offer a long-term target of 1.20*.
* Target calculation: 1.08 + ( 1.08 – 0.96 ) = 1.20
The Dollar Index is retracing after a strong rally over the last few weeks. Respect of support at 78.00 would indicate buying pressure, favoring a breakout above 80.00. Breakout would signal another primary advance — with a target of 85.00*.
* Target calculation: 80 + ( 80 – 75 ) = 85
Commodities are weakening and dragging the Aussie and Loonie lower. The Aussie dollar shows a similar iceberg pattern on 63-day Twiggs Momentum, warning of a primary down-trend. Breakout below primary support at $0.94 would offer a long-term target of $0.80*.
* Target calculation: 0.94 – ( 1.08 – 0.94 ) = 0.80
Canada’s Loonie is also headed for a test of $0.94 against the greenback. The peak below zero on 63-day Twiggs Momentum indicates a strong down-trend. Failure of primary support (0.94) would offer a target of $0.87*.
* Target calculation: 0.94 – ( 1.01 – 0.94 ) = 0.87
The Dollar Index is headed for a test of resistance at 80. The brief dip below zero on 63-day Twiggs Momentum suggests a solid primary up-trend. Breakout above 80 would offer a target of 85*.
* Target calculation: 80 + ( 80 – 75 ) = 85
The Brazilian Real has fallen sharply against the greenback since the government took measures to stem the inflow of funds on capital account. Breach of medium-term support at $0.56 would indicate respect of the descending trendline and another test of primary support at $0.52. In the long-term, failure of primary support would warn of a fall to $0.40.
* Target calculation: 0.52 – ( 0.64 – 0.52 ) = 0.40
The South African Rand is weakening against both the US and Aussie dollar. The Aussie (another resources currency) shows an accelerating up-trend against the Rand. Breakout above R8.30 would signal an advance to R9.00*. Accelerating up-trends, however, inevitably lead to blow-offs — as in 2008.
* Target calculation: 7.50 + ( 7.50 – 6.00 ) = 9.00
The Aussie is testing support at parity against the greenback. The “iceberg” on 63-day Twiggs Momentum indicates a primary down-trend. Failure of parity would test primary support at $0.94 and, in the long-term, breach of primary support would signal a decline to $0.80*.
* Target calculation: 0.94 – ( 1.08 – 0.94 ) = 0.80
63-Day Twiggs Momentum indicates a stronger down-trend on Canada’s Loonie. Failure of support at $0.975 would test primary support at $0.94 and, in the long-term, breach of the $0.94 level would signal decline to $0.80*.
* Target calculation: 0.94 – ( 1.01 – 0.94 ) = 0.87
The Aussie and Loonie normally move in sympathy with the CRB Commodities Index and a CRB break of its primary down-trend would warn of a reversal on the above two currencies.
The Dollar Index is headed for a test of resistance at 80* after respecting support at 76.50. The brief dip of 63-day Twiggs Momentum below zero also suggests a primary up-trend. In the long term, breakout above 80 would signal an advance to 85*.
* Target calculations: 77.5 + ( 77.5 – 75.0 ) = 80.0 and 80 + ( 80 – 75 ) = 85
The Aussie broke short-term support at $1.02, signaling a test of parity. The descending 63-day Twiggs Momentum “iceberg” warns of a primary down-trend. Breach of parity would indicate another visit to primary support at $0.94. In the long-term, failure of primary support would offer a target of $0.80*.
* Target calculation: 0.94 – ( 1.08 – 0.94 ) = 0.80
Canada’s Loonie “peeked” briefly above parity before retreating to test support at $0.975/0.980. Descending 63-day Twiggs Momentum, below zero, indicates a primary down-trend. Breach of support would test $0.94; and failure of primary support at $0.94 would offer a target of $0.88*.
* Target calculation: 0.94 – ( 1.00 – 0.94 ) = 0.88
The Dollar Index is headed for another test of resistance at 80 on the strength of the euro crisis. Respect of the zero line by 63-day Twiggs Momentum suggests a primary up-trend. Breakout above 80 on the index (or 5% on TMO) would confirm, offering a medium-term target of 85*.
* Target calculation: 80 + ( 80 – 75 ) = 85
The Kiwi respected the band of resistance at $0.80/$0.82 against the greenback, warning of a primary decline. Earlier breach of the rising trendline strengthens the signal. Failure of support at $0.75 would offer a target of $0.70.
* Target calculation: 0.75 – ( 0.80 – 0.75 ) = 0.70
