Forex: Aussie falls but Euro and Yen unfazed

After a weak rally to $0.98, the Aussie Dollar broke primary support at $0.96, signaling a strong down-trend. Long-term target for the decline is $0.80*.

Aussie Dollar/USD

* Target calculation: 0.95 – ( 1.10 – 0.95 ) = 0.80

Canada’s Loonie is also likely to break support at $0.96, offering a long-term target of $0.82*.

Canadian Loonie

* Target calculation: 0.94 – ( 1.06 – 0.94 ) = 0.82

The euro, however, broke resistance at $1.30 and is headed for a test of $1.32. Breach of that level would offer a target of $1.36*. But respect of $1.32 would warn of a head and shoulders reversal — completed if support at $1.27 is broken.

Euro/USD

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

The greenback reversed sharply against the Yen in the last week, falling from ¥104 to ¥99. But the scale of the reversal is placed in its proper perspective on a monthly chart. The primary up-trend is unfazed, and recovery above resistance at ¥100 would signal a fresh advance with a target of ¥110*. The 30-year secular bear trend is over. Long-term target for the advance is the 2007 high at ¥125*.

USD/JPY

* Target calculations: (a) 104 + ( 104 – 99 ) = 109; (b) 100 + ( 100 – 75 ) = 125

Forex: Aussie, Yen and Euro find support

The Aussie Dollar broke support at $0.96 against the greenback before retracing, the long tail indicating buying pressure. Expect a weak bear rally to test resistance at parity before another decline breaches primary support, offering a target of $0.90*.

Aussie Dollar/USD

* Target calculation: 0.96 – ( 1.02 – 0.96 ) = 0.90

The euro has so far respected primary support at $1.27. Breakout above resistance at $1.30 would suggest a primary up-trend; confirmed if the euro follows through above $1.32. Breach of support is unlikely, but would offer a target of $1.20/$1.22*.

Euro/USD

* Target calculation: 1.27 – ( 1.32 – 1.27 ) = 1.22

The greenback retreated sharply against the yen as Japanese investors repatriate offshore bond and stock investments — see Mrs Watanabe Brings Home the Bacon. But the longer term trend is unchanged. Respect of support at ¥100 would signal a fresh primary advance. Breach of the long-term declining trendline indicates the 30-year secular bear trend is over. Long-term target for the advance is the 2007 high at ¥125*.

USD/JPY

* Target calculation: 100 – ( 100 – 75 ) = 125

Forex: Aussie breaks support while Yen soars

The Aussie Dollar broke primary support at $1.015 and is testing parity against the greenback. Parity is not expected to hold and we are likely to see a test of the next major support level at $0.95/$0.96. Narrow fluctuation of 63-day Twiggs Momentum around zero continues to suggest a ranging market.

Aussie Dollar/USD

The euro is retreating, headed for another test of $1.2750. Respect would signal another attempt at $1.37, while failure would indicate a primary down-trend — testing long-term support at $1.20. The failed advance to $1.50 would be bearish; and breach of $1.20 would offer a target of $1.05*.

Euro/USD

* Target calculation: 1.20 – ( 1.35 – 1.20 ) = 1.05

Rapid expansion of the monetary base by the Bank of Japan is fueling inflation fears and weakening the yen. Lars Christensen points out that, with competitive devaluation from all quarters, exports are not likely to play a major part in a Japanese recovery. What is more likely is a consumption and investment boom as households invest in real assets as a hedge against inflation.

The greenback broke resistance at ¥100 against the Japanese Yen — a one-third appreciation from the lows of 2011/2012. Expect retracement to test the new support level, but breach of the long-term declining trendline indicates the 30-year secular bear trend is over. Long-term target for the advance is the 2007 high at ¥125*.

USD/JPY

* Target calculation: 100 – ( 100 – 75 ) = 125

Forex: Aussie consolidates while Sterling surprises

The euro is consolidating between $1.30 and $1.32. Upward breakout is more likely and would test the high of $1.37. Reversal below $1.30 would warn of another decline, to around $1.24*. In the long-term, breakout above $1.37 would signal a primary advance to $1.50. A 13-week Twiggs Momentum trough at the zero line would reinforce this.

Euro/USD

* Target calculation: 1.28 – ( 1.32 – 1.28 ) = 1.24

Pound sterling surprised with a reversal above resistance at $1.53. Follow-through above $1.54 would suggest an advance to around $1.58, while retreat below $1.52 would signal a down-swing to $1.43*. Declining 13-week Twiggs Momentum, below its 2011 lows, strengthens the bear signal.

Sterling/USD

* Target calculation: 1.53 – ( 1.63 – 1.53 ) = 1.43

The Aussie Dollar rallied off primary support at $1.015. Narrow fluctuation of 63-day Twiggs Momentum around zero suggests a ranging market. Respect of support suggests another test of $1.06.

Aussie Dollar/USD

Canada’s Loonie found support above $0.97 against the greenback, suggesting another test of $0.99. Breach of the rising trendline, however, would indicate another down-swing.

Canadian Dollar/USD

The greenback is testing resistance at ¥100 against the Japanese Yen. The 30-year down-trend of the dollar is over. Breakout above ¥100 is likely, and would suggest an advance to the 2007 high at ¥125*.

USD/JPY

* Target calculation: 100 – ( 100 – 75 ) = 125

The Fed, ECB and BOJ are all printing money and debasing their currencies. The US dollar, although taking on water, is viewed as the safest — because it is sinking slower than the others. There are signs the Fed is likely to slow quantitative easing in the next 6 to 12 months.

Forex: Euro finds support while Sterling, Aussie and Loonie fall

The euro respected primary support at $1.26 on the monthly chart. Follow-through above $1.32 would indicate another test of $1.37, while breakout above $1.37 would signal a primary advance to $1.50. A trough above zero on 13-week Twiggs Momentum would reinforce this. Reversal below $1.26, however, would signal a down-swing to $1.20.

Euro/USD

* Target calculation: 1.35 + ( 1.35 – 1.20 ) = 1.50

Pound sterling respected resistance at $1.53 against the dollar, confirming a down-swing to $1.43*. Declining 13-week Twiggs Momentum, below its 2011 lows, strengthens the signal.

Sterling/USD

* Target calculation: 1.53 – ( 1.63 – 1.53 ) = 1.43

The Aussie Dollar fell sharply, headed or a test of primary support at $1.015. Narrow fluctuation of 63-day Twiggs Momentum around zero suggests a ranging market. Respect of support would suggest another rally to test $1.06.

Aussie Dollar/USD

Canada’s Loonie respected resistance at $0.99 against the greenback. The primary trend is down and breakout below $0.97  would indicate another decline, while breach of $0.96 would strengthen the signal. Respect of $0.96, however, would suggest an advance back to the 2012 high of $1.03; strengthened if resistance at $0.99 is broken.

Canadian Dollar/USD

The greenback is testing resistance at ¥100 against the Japanese Yen. The 30-year down-trend of the dollar is over. Breakout above ¥100 is likely, after brief consolidation/retracement, and would suggest an advance to the 2007 high at ¥125*.

USD/JPY

* Target calculation: 100 – ( 100 – 75 ) = 125

The Fed, ECB and BOJ are all printing money and debasing their currencies. It is a case of which boat is sinking the fastest, and the US dollar, although taking on water, being viewed as relatively safe. The fall of gold reveals the market view that the Fed is likely to tail off quantitative easing in the next 6 to 12 months.

Forex: Euro correction while Aussie retraces

The euro is headed for a test of primary support at $1.26 on the monthly chart. Respect would confirm the primary up-trend, while failure would signal a down-swing to $1.20.
Aussie Dollar/USD

* Target calculation: 1.35 + ( 1.35 – 1.20 ) = 1.50

Pound sterling is testing the new medium-term resistance level at $1.53 against the dollar. Respect would confirm the primary down-trend, with a target of $1.43*. Declining 63-day Twiggs Momentum, below its 2011 lows, strengthens the signal.
Aussie Dollar/USD

* Target calculation: 1.53 – ( 1.63 – 1.53 ) = 1.43

The Aussie Dollar retraced this week to test short-term support at $1.04, but the up-trend is intact and we should expect a test of resistance at $1.06. Failure of support at $1.03 is unlikely, but would warn that primary support at $1.015 is again under threat. Narrow fluctuation of 63-day Twiggs Momentum around zero suggests a ranging market.

Aussie Dollar/USD

Canada’s Loonie rallied off medium-term support at $0.97 against the greenback. Expect some resistance at $0.99, but the CAD is just as likely to test the descending trendline at parity. The primary trend remains down and a test of primary support at $0.96 remains on the cards in the next quarter.
Aussie Dollar/USD

The US dollar is encountering increased resistance as it approaches ¥100 against the Japanese Yen. The 30-year down-trend is over. The advance is extended and a correction likely, but breakout above ¥100 would test the 2007 high above ¥120*.
Aussie Dollar/USD

* Target calculation: 100 – ( 100 – 80 ) = 120

Forex: Euro declines while Aussie follows through

The euro retreated below support at $1.30, indicating a correction to primary support at $1.2650. A 63-day Twiggs Momentum trough close to zero would suggest a primary advance, with a long-term target of $1.50*.
Aussie Dollar/USD

* Target calculation: 1.35 + ( 1.35 – 1.20 ) = 1.50

Pound sterling found short-term support against the dollar but the long-term target for the decline is $1.43*. Declining 63-day Twiggs Momentum, below its 2011 lows, strengthens the signal.
Aussie Dollar/USD

* Target calculation: 1.53 – ( 1.63 – 1.53 ) = 1.43

The Aussie Dollar followed through after breaking out above $1.03, signaling a rally to $1.06. Reversal below $1.02 is now unlikely, but would warn that primary support at $1.015 is again under threat. Narrow fluctuation of 63-day Twiggs Momentum around zero suggests a ranging market.

Aussie Dollar/USD

The Canadian Loonie found medium-term support at $0.97 against the greenback, but we should still expect a test of primary support at $0.96. Failure would warn of a decline to $0.90*, but respect is just as likely and would signal a rally to $1.02.
Aussie Dollar/USD

* Target calculation: 0.96 – ( 1.02 – 0.96 ) = 0.90

The US dollar continues to advance against the Japanese Yen, suggesting that the 30-year down-trend is over. Expect resistance at ¥100, with a possible correction back to ¥90, but breakout would test the 2007 high above ¥120*.
Aussie Dollar/USD

* Target calculation: 100 – ( 100 – 80 ) = 120

Forex: Aussie consolidates above primary support while Euro weakens

The euro is testing medium-term support at $1.30. Breach of the rising trendline against the greenback already warns of trend weakness; failure of $1.30 would test primary support at $1.25. Reversal of 63-day Twiggs Momentum below zero would warn of a primary down-trend, while a trough above zero would suggest another advance, with a target of $1.42*.
Aussie Dollar/USD

* Target calculation: 1.36 + ( 1.36 – 1.30 ) = 1.42

Pound sterling broke long-term support at $1.53 against the greenback, offering a target of $1.43*. Fall of 63-day Twiggs Momentum below 2011 lows strengthens the signal.
Aussie Dollar/USD

* Target calculation: 1.53 – ( 1.63 – 1.53 ) = 1.43

The Aussie Dollar is consolidating between $1.02 and $1.03 after respecting primary support at $1.015. Breakout above $1.03 and the declining trendline would suggest a rally to $1.06. Reversal below $1.02 would warn that primary support is again under threat. Narrow fluctuation of 63-day Twiggs Momentum around zero suggests a ranging market.

Aussie Dollar/USD

The Canadian Loonie is headed for a test of primary support at $0.96. Breach of support would offer a long-term target of $0.90*, but respect is just as likely and would signal a rally to $1.06.
Aussie Dollar/USD

* Target calculation: 0.96 – ( 1.02 – 0.96 ) = 0.90

The US dollar has broken its long-term declining trendline against the Japanese Yen, suggesting that the 30-year decline is over and the greenback likely to appreciate for some time. Advance to ¥100 is likely to be followed by a correction to test new support at ¥90 before breakout to test the 2007 high around ¥120*.
Aussie Dollar/USD

* Target calculation: 100 – ( 100 – 80 ) = 120

Forex: Euro and Sterling retreat while Aussie Dollar rebounds

The euro broke medium-term support at $1.32 and the rising trendline against the greenback. While this indicates trend weakness it does not necessarily mean reversal to a primary down-trend. Completion of a 63-day Twiggs Momentum trough above zero would suggest that the trend is intact — and an advance to $1.42* is on the cards.
Aussie Dollar/USD

* Target calculation: 1.36 + ( 1.36 – 1.30 ) = 1.42

Pound sterling broke long-term support at $1.53 against the greenback, offering a long-term target of $1.43*. Fall of 63-day Twiggs Momentum below -5% (its 2011 low) would strengthen the signal.
Aussie Dollar/USD

* Target calculation: 1.53 – ( 1.63 – 1.53 ) = 1.43

Against the euro, the pound is testing support at €1.15. 63-day Twiggs Momentum well below zero suggests a strong down-trend. Failure of support would offer a target of the 2011 low at €1.10.
Aussie Dollar/USD

The Aussie Dollar respected primary support at $1.015. Recovery above $1.03 and the declining trendline would suggest another rally to test $1.06. Reversal below $1.02 would warn that primary support is under threat.

Aussie Dollar/USD
Failure of primary support would offer a target of $0.96*. Oscillation of 63-day Twiggs Momentum close to zero, however, suggests a ranging market.
Aussie Dollar/USD

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

The Canadian Loonie by contrast is in a strong primary down-trend against the greenback, headed for a test of $0.96. Falling 63-day Twiggs Momentum suggests that medium-term support at $0.97/$0.98 is unlikely to hold.
Aussie Dollar/USD
The US dollar has broken its long-term declining trendline against the Japanese Yen, suggesting that the 30-year decline is over and the greenback likely to appreciate for the foreseeable future. Follow-through above ¥100 would confirm, offering a target of ¥120*.
Aussie Dollar/USD

* Target calculation: 100 – ( 100 – 80 ) = 120

Euro retraces

The Euro retraced to test support and the rising trendline at $1.32. Respect would indicate a primary advance with a target of $1.42*. 63-Day Twiggs Momentum well above zero suggests continuation of the primary up-trend. Failure of support at $1.32, however, would indicate a bull trap — with a target of $1.26.

Euro/USD

* Target calculation: 1.37 + ( 1.37 – 1.32 ) = 1.42