Forex: Euro, Sterling and Aussie Dollar strengthen
By Colin Twiggs
September 17th, 2012 11:30 p.m. EDT (1:30 p:m AET)
The Euro found support at $1.31, the short retracement suggesting a breakout above resistance at $1.34/$1.3450. Breakout would offer a target of $1.40*. Rising 13-week Twiggs Momentum indicates a healthy primary up-trend.
* Target calculation: 1.34 + ( 1.34 - 1.28 ) = 1.40Sterling is doing even better, breaking through resistance at €1.19 after piercing the descending trendline. Breakout completes a double bottom reversal with a target of €1.24*. Recovery of 13-week Twiggs Momentum above zero also suggests a primary up-trend. Reversal below €1.16 would warn of a bull trap, but is most unlikely.
* Target calculation: 1.19 + ( 1.19 - 1.14 ) = 1.24The greenback is stabilizing against the Yen after losing momentum over the last 3 months. The recent rally respected resistance at ¥100/101 and another test of ¥96 is likely. Breakout above ¥101 would offer a target of ¥106*, but failure of support at ¥96 remains as likely, and would warn of a primary down-trend.
* Target calculation: 101 + ( 101 - 96 ) = 106Canada's Loonie is headed for a test of the descending trendline and resistance at $0.9750. Bullish divergence on 13-week Twiggs Momentum favors a breakout, while recovery above zero would suggest a primary up-trend. Breakout would also complete a double-bottom reversal, with a target of parity*. Reversal below $0.96 is unlikely, but would warn of another test of primary support at $0.9450.
* Target calculation: 97.5 + ( 97.5 - 94.5 ) = 100.5The Aussie Dollar also completed a double-bottom reversal against the greenback — this time on a daily chart — offering a target of $0.95*. Follow-through above $0.93 confirms the signal. Reversal below $0.92 is unlikely, but would warn of another test of primary support at $0.89.
* Target calculations: 0.92 + ( 0.92 - 0.89 ) = 0.95The Aussie continues to weaken against its Kiwi neighbour. Respect of primary support at $1.12 and recovery above the descending trendline, however, would warn that a bottom is forming. Breakout above $1.16 would confirm, offering a target of $1.20*.
* Target calculations: 1.16 + ( 1.16 - 1.12 ) = 1.20
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