Forex: Aussie Dollar, Euro, Pound Sterling and Canada's Loonie

By Colin Twiggs
October 25th, 2012 2:00 a.m. ET (5:00 p:m AET)

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The Aussie Dollar (daily chart) is headed for another test of resistance at $1.04 against the greenback. A 63-day Twiggs Momentum trough above zero suggests a primary up-trend. Breakout above $1.04 would offer a target of $1.06*.

* Target calculation: 1.04 + ( 1.04 - 1.02 ) = 1.06

The Euro (weekly chart) is testing resistance at $1.32. Recovery of 63-day Twiggs Momentum above zero suggests a primary up-trend. Breakout above $1.32 — and penetration of the descending trendline — would confirm, offering an immediate target of the 2012 high at $1.35.

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

Pound Sterling (weekly) rallied off primary support at €1.225/€1.23 against the euro. Breach would complete a head and shoulders reversal with a target of €1.18*. Reversal of 63-day Twiggs Momentum below zero suggests a primary down-trend. Expect a test of resistance at €1.26 followed by another attempt at primary support.

* Target calculation: 1.23 - ( 1.28 - 1.23 ) = 1.18

Canada's Loonie (daily) is consolidating between $1.00 and $1.01 (USD). Downward breakout — and penetration of the rising trendline — would warn of another test of primary support at $0.96. But 63-day Twiggs Momentum is bullish and a trough above zero would suggest an advance to the 2011 highs at $1.06.

You can observe a lot by just watching.

~ Yogi Berra