Technical weekly 19102007

Equities
In the long-term , the general technical environment is in degradation but we do not observe sell signals validated on this horizon.
On a mid-term basis, a bull consensus (from an inverse head and shoulder pattern) is still in place.
This technical rebound aims at bringing back the indices to the height of their preceding high points.
During this movement of recovery, profit-takings occur and we need to monitor carefully the support zone.(arrow)
Daily technical indicators are already bearish so that the odds favor more downside in the coming days.
All this can be seen on the chart of the DJ Euro Stoxx 50 below.

The danger for the equity markets could be coming from India as the Sensex index recently validates a sell signal.
A break below the ascending support line would push the index more than 10% lower.(dot red line)

Bonds
Yields have fallen this week but as the long- term support rising trendline is not broken we do not favor more downside.Yields may continue to trade sideways in the coming days/weeks.

Brent
The Brent validates a bullish breakout from a triangle pattern above an important resistance.On the daily chart the first target according to fibonacci extension is above 86 and the next one around 94$.( this is also target of the triangle pattern)

Euro
No change, after having test the 1.40 support level, the €/$ resume its uptrend.
The upside target is 1.44 and the support zone 1.40.