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Forex: Euro, Aussie and Loonie strengthen

By Colin Twiggs
August 15th, 2012 3:30 a.m. EDT (5:30 p:m AET)

These extracts from my trading diary are for educational purposes. Any advice contained therein is provided for the general information of readers and does not have regard to any particular person's investment objectives, financial situation or needs and must not be construed as advice to buy, sell, hold or otherwise deal with any securities or other investments. Accordingly, no reader should act on the basis of any information contained therein without first having consulted a suitably qualified financial advisor. Full terms and conditions can be found at Terms of Use.



The Euro is consolidating between $1.32 and $1.34. Upward breakout would indicate a primary advance to $1.40*, while reversal below $1.32 would warn of another test of primary support at $1.27. Close oscillation of 13-week Twiggs Momentum around the zero line indicates hesitancy.

Euro/USD

* Target calculation: 1.34 + ( 1.34 - 1.28 ) = 1.40

Sterling respected primary support at €1.135/€1.140 against the euro. Recovery above €1.165 suggests that a bottom is forming. Penetration of the descending trendline would strengthen the signal. In the longer term, breakout above €1.19 would complete a double bottom with a target of €1.24. Recovery of 13-week Twiggs Momentum above zero would also indicate a primary up-trend. Reversal below €1.165, however, would warn the down-trend is likely to continue. Failure of primary support at €1.14 would confirm.

Pound Sterling/Euro

* Target calculation: 1.19 + ( 1.19 - 1.14 ) = 1.24

The greenback is headed for a test of primary support at ¥94 against the Yen. Breach of short-term support at ¥96 would confirm. In the longer term, breach of primary support at ¥94 would signal a down-trend with an initial target of ¥86*, while recovery above ¥101.50 would indicate an advance to ¥108*.

US Dollar/Yen

* Target calculation: 102 + ( 102 - 96 ) = 108; 94 - ( 102 - 94 ) = 86

Canada's Loonie is consolidating between $0.96 and $0.975 against the greenback. Upward breakout would penetrate the descending trendline, suggesting that a bottom is forming, while reversal below $0.96 would test primary support at $0.945.

Canadian Dollar/US Dollar

Short retracement of the Aussie Dollar against the greenback suggests buying pressure. Follow-through above $0.92 would test the descending trendline and resistance at $0.93. Breakout is unlikely, but would warn that the down-trend is ending. Reversal below medium-term support at $0.90 would warn of a decline to $0.87*, with a long-term target of $0.80*.

Australian Dollar/US Dollar

* Target calculation: 0.90 - ( 0.93 - 0.90 ) = 0.87; 0.95 - ( 1.10 - 0.95 ) = 0.80



It takes considerable knowledge just to realize the extent of your own ignorance.

~ Economist Thomas Sowell

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