Technical Weekly 24022006

EQUITIES
Earnings development in Europe remains strong and the Dow Jones Stoxx 600 closed at a 4 ½ year high last week.
New M&A developments are still bullish for the market.
In the short term the uptrend is likely to persist and nothing seems able to stop the index from rising right now.
In the US the SP 500 is close to break above the 1300 level, which is a significant resistance.
However euphoria is dangerous and the continuation of a steep uptrend could end in a buying climax that is likely to be followed by a major correction.
The chart below shows the Nikkey 225 testing the 15400 support zone.A break below this support will put Japan at risk for further underperformance in the coming weeks.














COMMODITIES

Brent
The Brent trades now above the 200 day moving average, but the upside move last week was not so impressive.
I expect a consolidation at this level. Meanwhile price could test the minor resistance (green line) around 60.3$ in the coming days and if this scenario takes place the target will be a rally towards new highs.


















Gold
Gold seems to stabilize around the 550$ level. The short -term correction may not be over and a drop to the 540$ level is still possible.However, the mid-long term outlook remains bullish.



















GERMAN 10 YEAR YIELD
The consolidation continues and the bond markets are tracing out the rebound that I was looking for to lead to an upside target around 3.7-3.8% for the German yield in the coming weeks.However in the coming days, a continuation of the current consolidation remains the most likely scenario.


















EURO-DOLLAR
Nothing-new last week as the rate continues to trade sideways.
Short- term volatility remains low.I still expected limited downside potential from here as the rate correct 61.8% from the November to end January bullish move, which is a normal process.