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Performance vs Anchor Currency In this case the performance of all currencies is displayed vs the USD with the exception of PLN, CZK, HUF, SEK and NOK which are tracked vs the EUR First Across and then Up or Down The %age change last week is displayed on the x-axis and the %age change so far this week is displayed on the y-axis Displayed as if the Base Currency If a currency shows a positive %age change it means it strengthened vs its anchor currency (USD/XZY or EUR/XZY fell) if a currency shows a negative %age change it means it weakened vs its anchor currency (USD/XZY or EUR/EYZ rallied) Four Quadrants Top right is Strong and Stronger where a currency has strengthened for both of the past two weeks, bottom right is Strong then Weak where a currency strengthened last week but weakened this week, bottom left is Weak and Weaker where a currency weakened for both of the past two weeks and top left is Weak then Strong where a currency weakened last week but strengthened this week Trending or Turning Simplistically speaking if a currency appears in the top right quadrant it indicates its trending higher and if a currency appears in the bottom left it indicates its trending lower. If it appears in the bottom right it is turning lower and if it appears in the top left it is turning higher A chart of this type will now be included most weeks. Were very open to suggestions of possible future topics for the TOT to TRACK.
Past performance is not an indicator of future results. Future returns are not guaranteed, and a loss of original investment may occur.
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
The initial flattening trend from Jan. 11 to May 12 appears to have broken into 5-waves (which is how underlying trends often begin in Elliott terms). That flattening trend also began when the curve stood close to the highs of its multi-decade range. So far the 76.4% retrace of the initial flattening trend is holding well. Weekly oscillators are beginning to cross lower (again) to complete triple negative weekly divergence. Overall a significant flattening of the curve appears likely over time (potentially bullishly initially given the signals of a top in place on U.S. 10-year yields with 2-year yields like more range bound in relative terms). The setup on the 2-/30-year curve is similar.
This really seems an incredibly important chart to have on the radar. When the 2-year spread does eventually make a clean break from its multi-year consolidation (pivots at 0bps and -33bps) it will likely be a very important development (for the spread itself and EURUSD spot given the tight correlation between the two highlighted later in the chart pack).
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
Past performance is not an indicator of future results. Future returns are not guaranteed, and a loss of original investment may occur.
Compared to the sharp drop from the Aug. highs and the relatively quick move down over the past couple of sessions, the bounce in yields from the 3rd Oct. low to the recent high looks quite corrective in nature. Given the clean/clear break of the uptrend from 3rd May which is already in place, coupled with a move below the 55-dma after a stretched number of consecutive daily closes above, risks look increasingly skewed towards a notable decline in 10-year yields. There are various points to watch below the market, but at face value the gap to the 200dma at 2.24% is large.
If a clean weekly close back below this level is achieved it should be another signal that a notable peak in yields has already been set (particularly given the setup will look very similar to that which developed at the Feb. 11 highs when a similar false break above the then primary downtrend was achieved). The next level to watch is the 200-wma at 2.519% and also 2.606% as a close below that point on Friday will cause a weekly reversal towards lower yields to be posted. The big pivot should be 2.42-2.33% where three notable interim highs/lows were set from Oct. 10 to Mar. 12.
Past performance is not an indicator of future results. Future returns are not guaranteed, and a loss of original investment may occur.
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
At the start of this week yields ticked back above the 55dma, but that move looks false, as it was in early-Mar. and early-Apr. 11 when a similar underlying setup to now was in place (highlighted in red on the chart). On Wednesday a key day towards lower yields was posted. Overall further decline in yields seems likely with the next clear pivot being centred on 3.49-3.46% (converged series of notable lows/highs set from Aug. 10 to Mar. 12). The 200-dma is all the way down at 3.368%.
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
Past performance is not an indicator of future results. Future returns are not guaranteed, and a loss of original investment may occur.
Monthly oscillators are now attempting to cross down from the highs of their recent range too. Overall it looks as though a significant period of consolidation/retrace of the rise in yields from Jul. 12 onwards (at least) is likely. Its far too early to actively argue for this, but it needs to be kept in mind that a notable cyclical peak could have been set.
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
Past performance is not an indicator of future results. Future returns are not guaranteed, and a loss of original investment may occur.
The proximity of the highs of the multi-year range seems to make this an ideal level against which to watch for any signs of the curve preparing to enter a flattening trend (which the weekly setup highlighted again opposite seems to imply is likely).
As highlighted in the Theme Radar earlier in the chart pack, the weekly setup continues to look really interesting. The initial Jan. 11/May 12 drop appears to break into a clear 5wave sequence, the recovery from the May 12 low then appears potentially a corrective ABC into the 76.4% retrace of the initial flattening. In short this looks a classic setup from which to see the curve again flatten materially (particularly given the ve weekly oscillator divergence which developed against the recent series of marginal new trend highs).
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
Past performance is not an indicator of future results. Future returns are not guaranteed, and a loss of original investment may occur.
10
The interim lows from Jan./Sep. are now converged ~1.15-1.55% below current levels. The markets inability to sustain back above the low from Jun. at 80.50 and the risk of a bearish weekly reversal if Fridays 5pm NY close is set below 79.837 should indicate that a move to this region is increasingly likely (particularly taking into account the cross asset signals, especially yields, discussed on the prior slides). The fact weekly oscillators are moving very close to the base of their recent range does however argue against looking for a protracted/extend period of weakness.
From the Apr. 95 low into the May 96 high the market formed what at the time would probably have appeared to be a bearish wedge. The market broke sharply lower from that formation in mid-Jul. 96, but it didnt fulfill what arguably could have been the target; a move to new cycle lows, instead after one sharp weekly drop and two further weeks of gradual decline it entered a broad based sideways consolidation for ~5-months. Eventually it then accelerated higher again in late-Nov/Dec. 96.
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
Past performance is not an indicator of future results. Future returns are not guaranteed, and a loss of original investment may occur.
11
The next ST level to watch should be the recent trend high from Feb. at 1.3711 and then the primary downtrend from the Jul. 08 peak at 1.4002 (its worth keeping in mind assuming equal %age moves that the base of the recent range on the DXY implies something in the region of ~1.3815-1.3865 on EURUSD).
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
Past performance is not an indicator of future results. Future returns are not guaranteed, and a loss of original investment may occur.
12
The trend across the prior major highs from Mar. 00/Oct. 07 and the peak from Oct. 07 itself, which are converged 1,594-1,576, should now be the big pivot support to watch. Thus far with the breaks which are in place it seems best to give the market the benefit of the doubt, i.e. not actively look for a major peak/downside turn until clear longer-term negative signals develop (which they dont seem to have done yet). The only thing clearly giving a cautionary message is the fact that monthly oscillators are back near the highs of their recent range, but this has not proved a particularly useful signal in the past until negative divergence has developed.
There have been nine such patterns posted since mid-11 and six worked well (indicated by the + and - symbols on the chart). Therefore while not having a perfect track record this seems to emphasise that the recent sell off was met with good demand. On the daily chart (not shown) 1,709-1,710 was a notable ST resistance point (converged interim high from 2nd Aug. and 76.4% retrace of the 19th Sep./9th Oct. drop) which the market closed above on Wednesday. This should further support the potential for the index to move to new highs over time. Its also probably now a decent support point to watch if the market does retrace again.
Past performance is not an indicator of future results. Future returns are not guaranteed, and a loss of original investment may occur.
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
13
The sharp reversal from last weeks extreme also caused the market to post a bearish engulfing week (the Japanese candle equivalent of a bearish weekly reversal). It now basically looks as though the VIX is likely set to move into an ~22/12 range (the chain of lower-lows which developed from Mar. 12 onwards has already been broken as the market has set two higher lows since the trend base from Mar. this year). Reading into this it would seem to imply that market concern has likely peaked for now, but is no longer in the broad declining channel/wedge in which it oscillated from Jun. 12 onwards.
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
Past performance is not an indicator of future results. Future returns are not guaranteed, and a loss of original investment may occur.
14
Tuesdays intraday low was set just above the 76.4% retrace of the 28th Jun./28th Aug. rally at 1,240 (the late recovery that day caused a hammer blowout candle pattern to ultimately be posted against the trend base). The important daily close pivot to watch now should be 1,301-1,311 where the downtrend from Aug.s high and 21-dma are converged, particularly given the overlapping nature of the drop from Aug.s peak. The big question is whether a broader recovery towards 1,433-39 can develop (Aug. high and 200-dma). Daily oscillators are attempting to diverge +vely against the recent marginal new lows.
Given the longer-term structure of the market; aggressive break lower from a multimonth range earlier this year, overlapping ABC like recovery from the Jun. low and big resistance band starting at ~1,433, there doesnt seem enough evidence to argue for a more sustained recovery/uptrend at this point.
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
Past performance is not an indicator of future results. Future returns are not guaranteed, and a loss of original investment may occur.
15
This follows the market making a false break below the Dec. 11 low at 1,338 and posting a near perfect 76.4% retrace of the initial Jun./Aug. rally before bouncing again. A bullish weekly reversal will be posted if Fridays close is above 1,406.24. The pivot of the reverse H&S pattern should be 1,522-1,533 where the 55-wma and interim high from Aug. are converged (i.e. a close above here should start to confirm the pattern in place and the resultant projection target of ~1,815). Next resistance to watch should be the downtrend from Mar. 08 at 1,689.
Positive divergence formed against the most recent marginal new trend lows and the downtrend from the 4th Sep. high has also been broken. Besides the weekly chart pivots highlighted opposite it will now be important to watch price action closely if and when the 200-dma up at 1,502 is tested.
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
Past performance is not an indicator of future results. Future returns are not guaranteed, and a loss of original investment may occur.
16
The Aug. peak at 10.51 was within the multi-year resistance band formed by the converged downtrend from the Dec. 01 high and 76.4% retrace of the Oct. 08/May 11 drop which were converged 10.47-62. Monthly oscillators are also attempting to cross down from quite close to their multi-year range highs. These monthly chart signals have been in place for a number of weeks but its always been unclear what the cross asset rationale was for ZAR to recover (rising U.S. rates were generally considered a ve as was weakness in the Gold market, but both now seem to be reversing). It seems theres potentially a far more ZAR-supportive backdrop in place.
Weekly price action from late-May onwards potentially looks quite heavy too as the market has never really made a true/sustained weekly rally since that time, most weeks it has tried to push beyond ~10.30 it has tended to subsequently corrected lower to leave a ve weekly candle against the trend peak. A test of big pivot support below running 9.40-9.32 looks quite possible (converged uptrend from Jul. 11, Mar. 13 interim high and 55-wma). Weekly oscillators developed clear ve divergence against the recent marginal new trend highs to help confirm the upmove had become exhausted.
Past performance is not an indicator of future results. Future returns are not guaranteed, and a loss of original investment may occur.
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
17
The marginal new trend lows from late-Aug. vs those of early-Jun. have enabled the pair to develop +ve divergence against the base of the recent decline highlighting the downtrend off the Apr. peak has likely lost momentum. Weekly moving averages are tightly clustered theoretically indicating the market is trend ready.
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
Past performance is not an indicator of future results. Future returns are not guaranteed, and a loss of original investment may occur.
18
On most occasions since the mid-90s when this sort of stretch has developed a notable downside correction has subsequently taken place. However, in this case , given price action off the May peak still looks potentially like a bullish continuation pattern (possibly in its final stages of formation) and the underlying setup looks quite like 9597 when the trend extended to ~450 consecutive daily closes above the 200-dma, for now it seems best to give the market the benefit of the doubt and hold with bullish exposure/a +ve bias until/if a daily close (5pm NY) is achieved below the 200-dma. The big upside pivot to watch should be 99.61-67 where the downtrend from Mays peak, interim high from 20th Sep. and 76.4% retrace of the 11th Sep./8th Oct. drop are converged.
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
Past performance is not an indicator of future results. Future returns are not guaranteed, and a loss of original investment may occur.
19
The only time a substantially more extended trend above (or below) the 200dma has developed over the past two decades was in 95/96/97
At 241 consecutive daily closes above the 200-dma (as of Wednesdays 5pm NY close) USDJPYs uptrend is moving into quite extreme territory. Substantially more than 200 consecutive daily closes above (or below) this moving average is usually unsustainable (looking back over the past two decades)
In 96 the closest USDJPY moved to the 200-dma was 81 pips above on 5th Aug. at which point it had set 257 consecutive closes above
+456
+228
+207
+241
Tracks the number of consecutive daily closes the market has made above/below its 200-dma
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
Past performance is not an indicator of future results. Future returns are not guaranteed, and a loss of original investment may occur.
20
The actual stats are shown on the charts, but in simple terms, the average initial drop when the market breaks below the 200-dma after an extended trend above (based on these four examples) is 5.32 big figures (for specifics on each case please see the chart).
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
Past performance is not an indicator of future results. Future returns are not guaranteed, and a loss of original investment may occur.
21
This chart shows USDJPY spot in blue, the Nikkei in red and an equally weighted basket of the U.S./Japan 2-/5-/10-year yield spreads in green. It highlights that for at least 6-months the true link has been with the Nikkei (i.e. risk appetite) and not U.S./Japan spreads. With this in mind while the recent sharp drop in U.S. yields which has shifted spreads in the JPYs favour may well have been associated with USDJPY moving lower so far during Thursdays session, the real determinant of the next USDJPY trend should more likely be the performance of the Nikkei and broader asset markets globally.
As with USDJPY given the underlying structure of the market (which looks quite positive) bias is to look for an eventual push higher. The key pivot above should be the 76.4% retrace of the 23rd May/13th Jun. drop at 15,110 as the market has respected this particular retracement quite well on numerous occasions over recent months. With this in mind its worth noting that the market has just ticked above the most recent 76.4% retrace at 14,565 (as happened at the 27th Sep. high too), the retraces are however holding as support against the lows, could this indicate the market is preparing to break higher?
Past performance is not an indicator of future results. Future returns are not guaranteed, and a loss of original investment may occur.
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
22
Converged in this region are the interim high from 19th Sep., 200-dma and neckline of a possible reverse H&S. The confusing thing about this particular cross is that the initial decline from the 11th Apr. high to the 7th Aug. low appears to break into 5-waves which is often how broader downtrends begin. Given this its difficult to know how much emphasis to put on the H&S pattern. Overall the way price action develops around here will likely be critical; signs of a top/turn lower could fit with the potential ve implications of the prior 5-wave sequence, where as a meaningful close above could argue the reverse H&S interpretation is correct .
If a material daily close above the H&S target is achieved (which would also by default give a clean break above the spike low from Jun. 12 at 0.9581) it could open some further upside with the 200-dma up at 0.9767 as the next potential target.
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
Past performance is not an indicator of future results. Future returns are not guaranteed, and a loss of original investment may occur.
23
In this region are the interim high from 19th Sep., neckline of a possible reverse H&S and the 200-dma. Very similar to AUDJPY as discussed on the prior slide, a clean close above this region is likely needed prior to establishing bullish exposure (it would potentially complete the reverse H&S to project a target of 51.00, very close to the trend high from May at 51.02). Any signs of a peak here will also likely have to be taken seriously as triple negative daily oscillator divergence could potentially develop following the recent series of marginal new trend highs.
This should be the first level against which to watch for signs of the markets decline losing momentum (the interim peak from early-Dec. 12, 55-wma and uptrend from Jul. 11 are converged around this point). Signs of a base here would likely be important, but it is probably too early to look for subsequent underlying uptrend resumption given the almost two-year rally prior to this correction beginning, i.e. the retrace seen so far would seem extremely shallow in terms of time relative to the prior move which it is theoretically correcting.
Basically a significant move seems likely in the not too distant future. How USDJPY performs around its 200-dma may have a lot to do with the eventual direction of a break.
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives. Past performance is not an indicator of future results. Future returns are not guaranteed, and a loss of original investment may occur.
24
This puts focus on the neckline of a potential H&S topping structure and related break confirmation point which run 30.87-85. A close below that region could at least open the 200-dma down at 30.42 and potentially further if a move toward the full H&S top target was to take place.
The double top like pattern which has completed against the trend high from Jul./Sep. theoretically projects ~30.99 (nearly 3% below current levels). First support to watch 31.51-31.49 where the interim lows from Sep./Jun. are converged.
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
Past performance is not an indicator of future results. Future returns are not guaranteed, and a loss of original investment may occur.
25
The pivot runs 1.103-1.123. A weekly close above this region should theoretically complete a double bottom pattern to project 1.2983, i.e. ~12% above the pivot (neckline).
The reverse H&S which has been completed here theoretically gives a projection target of ~11,841 (a little below the post financial crisis high from Jan. 10 at 12,240). Looking at the daily chart (not shown), after the recent very impulsive uptrend there are some ST signs of exhaustion; a mild shooting star like candle pattern was posted against the highs on Thursday and the market is very over-bought in oscillator terms. This likely increases the risks of a retrace towards the 21-dma which stands down at 9,415, but likely a dip to that level should be an opportunity to establish bullish exposure at more attractive levels.
Past performance is not an indicator of future results. Future returns are not guaranteed, and a loss of original investment may occur.
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
26
Again on the daily chart (not shown) the market is now at over-bought levels in oscillator terms so some consolidation/retrace may be necessary. The 21-dma stands down at 18,329 as the first clear support/pivot point to watch. However, given this underlying structure dips really seem likely to be opportunities to establish bullish exposure at more attractive levels.
The big pivot to watch should be the Jan. high at 11.89 (~7% above current levels). The 200-wma then stands an even greater ~24.5% above here.
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
Past performance is not an indicator of future results. Future returns are not guaranteed, and a loss of original investment may occur.
27
The moving average currently comes in at 1.2320 and Thursdays intraday low (1.2312) was set only just below it. Subsequently the market has recovered. Could a double bottom like pattern be forming against the 24th Jun. low at 1.2217? Pivot resistance to watch on the upside should be the downtrend from 9th Jul. at 1.2386.
This historically important moving average for FX has started to act as support (particularly on a weekly close basis). Could this be a signal that the market is beginning to build a base (supported by the strong performance of the peripheral asset markets). The post-floor high from May and 200-wma are converged up at 1.2650-62 as a potential upside target/pivot to watch (its worth keeping in mind that the IBEX and MIB have only recently closed back above their 200-wmas for the first time since the financial crisis began in earnest back in 08 could EURCHF therefore be the next market to do the same?).
Past performance is not an indicator of future results. Future returns are not guaranteed, and a loss of original investment may occur.
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
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The post crisis high from May and the 200-wma (which the index has been below on a weekly close basis since Jun. 08) being converged in this region. A clear weekly close above it (as seems likely eventually; the market appears to have been forming a bullish consolidation over recent months) should act as confirmation of a significant turn in LT trend in place (i.e. possibly the end of the bear trend which started at the Nov. 07 highs). The next clear pivot to watch/target to look for should be 1,458-1,462 where the lows from Mar. 03 and Mar. 09 are converged. Theoretically though a much larger recovery could develop; the entire decline from the Sep. 99 high to the Jun. 12 low could be a big ABC like correction (the low, in the grand scheme of things, was set what seems only marginally above the related equality target).
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The ASE also looks potentially quite +ve vs the Dax too
The ASE/DAX ratio bases just above an equality projection from Sep. 99 The weekly chart potentially looks very constructive
Even the primary downtrend from 99 stands over 150% above current levels.
This is particularly the case in Elliott terms; the initial rally from the May 12 low to the Feb. 13 high appears to break into a clear 5-wave sequence and the pull back from there looks like a corrective/overlapping retrace of that initial uptrend. The 200-wma as a potential initial target stands ~38% above current levels.
Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or counsel. This material is intended for illustrative purposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express) as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.
Past performance is not an indicator of future results. Future returns are not guaranteed, and a loss of original investment may occur.
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