Technical Weekly 03012006

EQUITIES

Tuesday, European stocks had their biggest gain in a month after manufacturing in the region grew in December at the fastest pace in 16 months and German unemployment plunged.
It looks like the European economy is improving and that is good news for stocks.
Stock markets remain in their uptrend, which is likely to persist into the first quarter of 2006. It also appears quite likely that individual stock selection and transaction timing on both sides of the market will be much more important this year than it may have been last year.
Graph.1 shows the Euro Stoxx 50 approaching the 3700-3800 resistance zone which is technically speaking an important level because it is a 50% retracement of the fall between April 2000 and March 2003 and also because many investors and traders look at Fibonacci numbers.













COMMODITIES

Brent

The Brent continues to rise on concern that supply will be insufficient and trades now close to the psychological level of 60$.
The strong bullish trend is back and the medium-term target is close to the 70$.














Gold
A major bull signal was given for gold with the breakout of the very long-term base.
A strong bullish acceleration at the end of 2005, led to the realization of a medium term target. Gold is now entering into a consolidation phase. However, the uptrend should resume. The long term potential is located at 550 $.














GERMAN 10 YEAR YIELD
European bonds dropped on signs growth in the 12 nation economy is accelerating, bolstering speculation the European Central Bank will raise interest rates this year.It will be interesting to see if the rate of the German 10 Year is able to break above the older support, now strong resistance, as it retrace 50% of the rise from September to mid-November 2005.














EURO-DOLLAR
In the short term the rate continues to trade sideways between 1.17-1.19, but the long-term trend remains down.Only the break above the psychological level of 1.20, which is the confluence of two resistances lines would reverse the momentum.