Citi's Today's Highlights

 

CitiFX^® Technicals – Today’s Highlights

Technical Developments in the Foreign Exchange and Asset Markets

	USD Neutral ST	The relatively benign market environment of recent days suggests a more constructive outlook in the short-term for Stocks and commodities and a move higher in yields.   Foreign Exchange: USDJPY looks constructive in the ST. ·          USDJPY: Testing the 55 dma and channel top resistance area at 94.12 – 94.30. We would not be surprised to see a test of 95.77 and further gains towards 100+ in the ST particularly if and when equities and yields stretch higher still. ·          EURGBP: We may have seen the end of a 5 wave bull market pattern. It is too soon to confirm this but we are focused on the support level at 0.9020…This currency pair would look weak below there. ·          GBPCHF: The hammer pattern at the lows suggests that the pair could bounce in the ST. ·          USDCHF: Rallied through resistance and could re-test the 55 day moving average. ·          AUDUSD: Remains below resistance for now though a rally through 0.7239 would be a bullish development.   Fixed Income: U.S. yields are setup for further gains and German yields are likely to underperform ·          U.S. 10 year yields: Strong bullish weekly reversal posted last week. Was that a low? Are we going to get a ‘V’ bottom like in 1993, 1998 and 2003??? While it is too soon to say with great conviction, we are watching ST developments and are entertaining the idea that U.S. 10 year yields could test 3% very quickly. ·          German – UK 2 year yield spread: Failing at good long term resistance and is likely to fall over the coming days and weeks. ·          German – U.S. 2 year yield spread: The trend is still down   Equities: Overall the equity markets look constructive ·          FTSE 100: Breaching resistance levels and a move to 5,000+ cannot be written off.   Commodities: Industrial metals are turning up in the ST. ·          Copper: Starting to turn up. We are taking a leading indication from the S&P metals and mining index which put in a low on 20th Nov 2008. It also gave a leading indication at the highs. ·          Aluminium: The reverse head and shoulders and the Fibonacci retracement against the lows suggests a good ST rally ahead. ·          London Metal Exchange Index: The long term head and shoulders target has been met and a bullish weekly reversal at the lows has been posted. ·          Crude: The bounce has taken Crude back up to the resistance level at $50. A rally through here would be a significant bullish development.   Emerging Markets: USDCLP still looks vulnerable ·          USDCLP: The bounce has re-tested the 55 dma at 650 and the market could still be forming a double top pattern. The important support level is at 623.	Portfolio
USD Neutral LT

 

 

                                               

       

Tom Fitzpatrick Chief Technical Analyst 390 Greenwich Street New York, 10013. +1 212 723 1344 thomas.fitzpatrick@citi.com

Shyam Devani Technical Analyst Citigroup Centre Canary Wharf, London, E14   5LB +44 207 986 3453 shyam.devani@citi.com

   

 

 

 

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