Technical Weekly 11052007

Equities

Bad economic figures and renewed concerned about inflation after Fed comments triggered significant downside acceleration below 4400 on the DJ Euro Stoxx 50.
This technical breakdown is bearish in the short-term as it confirms the sell signals validated by most daily technical indicators.
On the chart, you can see that there is a short-term risk is of seeing a more significant correction towards the 4170 level (4% downside risk) and may be towards the lower trend-line of the uptrend channel .(7% downside risk)
For now, I expect just a pullback rather than the start of a major trend reversal.

Bonds
No change, the German bond yield is still forming a bullish flag, which means that we keep our targets of 4.5% and may be 4.85% for the coming weeks/months.
On a short term basis the trend is neutral.

Brent
Oil prices have reversed the near term uptrend and are now caught in a short-term downtrend channel.
Strong support is located around the 60$.

Euro
The correction is still underway and the rate is testing the 1.35 level.
A break below this level could provoke a deeper pull-back towards the major
support line (red line on the chart).
The long term trend is still up for the Euro.