Forex: Euro and Aussie rise as Dollar weakens
By Colin Twiggs
October 3rd, 2012 3:30 a.m. EDT (5:30 p:m AET)
The Euro respected support, on a brief retracement to $1.34/$1.3450, before following through above the last two week's high — signaling a test of the February high at $1.37. Breakout would offer a long-term target of $1.46*. The trough above zero on 13-week Twiggs Momentum indicates a healthy up-trend. Respect of resistance is unlikely, but would warn of another correction.
* Target calculation: 1.37 + ( 1.37 - 1.28 ) = 1.46
The greenback is heading for a test of primary support at ¥96 after breaking short-term support at ¥98 on the daily chart. Failure of support would offer a target of ¥92*. Reversal of 13-week Twiggs Momentum below zero would also warn of a primary down-trend. Recovery above the descending trendline is unlikely at present, but would indicate a rally to ¥100.50.
* Target calculation: 96 - ( 100 - 96 ) = 92The Aussie Dollar has so far respected support at $0.93 against the greenback. Follow-through above $0.94 would suggest an advance to $0.97; confirmed if resistance at $0.95 is broken. Reversal below $0.93, however, would warn of a correction to primary support at $0.89.
* Target calculations: 0.95 + ( 0.95 - 0.93 ) = 0.97The Aussie continues to test support at $1.12 against its Kiwi neighbour. Tall shadows (wicks) for the last two weeks indicate selling pressure. Failure of support would offer a target of $1.08*. Recovery above the descending trendline is less likely, but would suggest an advance to $1.20; breakout above $1.16 would confirm, completing a double-bottom reversal.
* Target calculations: 1.12 - ( 1.16 - 1.12 ) = 1.08
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