Technical Weekly 15062007

Equities
Equity markets are recovery strongly.
This can be seen in the hourly chart of the DJ Euro Stoxx 50 which is showing a double bottom bullish pattern.(circle)
The long term picture is clear as it remains bullish; it is the shorter term that needs constant analysis and reassessment.
And the question here is: is the market sell off done now and is this a new buying opportunity?

I think a trading range is the highest probability in the coming weeks : as it remains difficult to find sell ideas but on the other way we do not forget that tops often take a long time to develop.
For now the index makes a classic pull-back to the resistance line that was broken last week.
On a sector basis Health Care continue to under-perform strongly while Oil&Gas and Technology are confirming their re-rating process.

Bonds
I don’t change my technical target of 4.85% for the coming weeks /months for the German 10-year bond yields.

But yields are now strongly overbought on all time frames, so that a short term pullback is possible.

Brent
No change, still bullish above 70$.
The Brent could soon challenge the 75$ resistance zone(rectangle on the chart).

Euro
The long term trend remains positive for the Euro and the short term trend positive for the $.
We are now very close to support around 1.33.
This support must hold in order to expect a resumption of the uptrend.