Technical Weekly 18042006

EQUITIES
The Euro Stoxx 50 and the SP 500 are now close to support level.
I believe that global equity markets could be vulnerable in the short run if oil prices and bond yields keep rising.
The chart below shows the Euro Stoxx 50 with 3 momentum indicators.
The first one, the more important, shows that the long-term trend is still rising.However, the second one which is a weekly momentum is close to give a sell signal and the third one (daily) is still bearish which means that if support is broken, the correction is likely to go further probably toward the 3600 level.


















COMMODITIES

Brent
Last week the Brent broke through its 2005 peak to reach his highest level ever.
The Brent has also moved through the psychological level of 70$.
I stay with my mid-term target of 84-85$ in the coming weeks.

















Gold
Easily exceeded my short- term target of 610$.
The trend remains bullish and the next target around 630$ could be reached soon.
















GERMAN 10 YEAR YIELD
Is now close to the 4% psychological resistance.
I suggested last week that the next upside target was 4.5%.
While I remain convinced that bond yields have embarked on a new uptrend, there is still another technical hurdle that they have to overcome to prove that the long-term downtrend in long-term rates has finally ended.
The monthly chart below shows the downtrend in yields from the 1990 peak. Needless to say, a move above that resistance line around 4.3% would be the final sign that the era of long long-term rates has finally ended.

















EURO-DOLLAR
Breaking above the 1.22 level again.
I continue to favour $ selling and believe that the rate could reach 1.24 in the coming weeks.