The Euro is retracing to test support at $1.37 on the monthly chart. Bearish divergence on 13-week Twiggs Momentum continues to warn of medium-term weakness, and penetration of the rising trendline/support at $1.35 would warn of a bull trap. Follow-through above $1.40 is unlikely at present, but would signal an advance to $1.46*.
* Target calculation: 1.37 + ( 1.37 – 1.28 ) = 1.46
Dow Jones Euro Stoxx 50 found support at 3100. Recovery above 3180 would signal another advance, but bearish divergence on 13-week Twiggs Momentum suggests weakness. Failure of 3100 would warn of a correction to test 2900/3000.
The DAX found support at 9200 and recovery above 9400 would suggest another test of 9800. Breakout above 9800 is unlikely, but would offer a target of 10600*. Bearish divergence on 13-week Twiggs Money Flow continues to indicate medium-term selling pressure, until the descending trendline is broken. Further consolidation between 9000 and 9800 is the most likely outcome. Breach of primary support at 9000 is unlikely, but would signal reversal to a primary down-trend.
DAX Volatility is rising, but continues to indicate low risk typical of a bull market.
The Footsie similarly found support at 6500. Recovery above 6750 would signal another attempt at 6850. 13-Week Twiggs Money Flow oscillating above zero continues to indicate healthy (long-term) buying pressure. Reversal below 6400 (and the rising trendline) is unlikely, but would signal a primary reversal. Breakout above 6850 is also unlikely at this stage, so again further consolidation is the most likely outcome.
