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    GLOBAL MARKET PROSPECTS:

    WHAT THE CHARTS SAY!

    January 2013

    Stphanie Ayms Loic de Galzain

    Phone: + 44 (0) 207 762 5898 Phone: + 33 (0) 1 42 13 47 12

    [email protected] [email protected]

    Important Notice: The circumstances in which this publication has been produced are such that it is not appropriate to characterise it as independent investmentresearch as referred to in MiFID and that it should be treated as a marketing communication even if it contains a research recommendation. This publication is also notsubject to any prohibition on dealing ahead of the dissemination of investment research. However, SG is required to have policies to manage the conflicts which mayarise in the production of its research, including preventing dealing ahead of investment research.

    Societe Generale (SG) does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that SG mayhave a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making theirinvestment decision. PLEASE SEE APPENDIX AT THE END OF THIS REPORT FOR THE ANALYST(S) CERTIFICATION(S), IMPORTANT DISCLOSURES ANDDISCLAIMERS AND THE STATUS OF NON-US RESEARCH ANALYSTS.

    First Quarter 2013

    mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]
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    OUR MAIN CALLS

    Euro-denominated assets to keep brightening until spring/summer (p8)

    As highlighted in our previous What the charts say! last October, the easing of financial tensions in Europe has resulted in the

    confirmation of major trend reversal technical patterns on the Euro vs. all currencies, European sovereign CDSs and core-peripheral bond spreads and on the equity financial sector. The combined view on the EUR/USD and on European indicessuggests they will outperform further into Q1/Q2 but the timing will be critical then.

    Commodities and emerging equities disconnect? (p25)

    Except for Gold, where we expect prices to rally and peak between $1,800/$1,921 before starting a gradual decline in H2,commodities should recover overall, but with limited upside. On the other hand, the MSCI emerging is set to outperform(+20%) towards 2008 tops.

    Still some action in the FX space (p33)

    In our previous report, we anticipated the major trend reversals on the JPY and the GBP. Even though these bearish trendsprevail, we are getting indications that a pause is long overdue. Also, our attention now goes to the NOK and the AUD, morespecifically on the EUR/NOK and the EUR/AUD as they may well be the next main FX movers. They are, in our view,completing four years of correction and have been showing signs of fatigue of late.

    Cherry picking on rates (p19)

    While our central call for the US rates to bottom out still prevails, we believe UST10 yields may be entering the accumulationphase soon, and hence it could experience some hiccups along the way. The recent developments on European short-endrates are of particular interest as we see on Schatz and especially on Euribor the confirmation of major trend reversal patterns.We also identify some interesting convergence opportunities, with European peripheral bonds tightening the gap with the core,as well as certain opportunities among core bonds.

    Despite recent strength, our core scenario remains bullish on US equities which is maturing (p41)

    Although the distribution phase has not started yet, the SP500 is gradually rising towards the multi-year high at 1550/75. TheUS High Yield index is also closing in on pre-crisis levels with a marked lack of momentum on indicators.

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    INDEXES: MAJOR PEAK UNLIKELY UNTIL SPRING 2013

    Indexes

    Equity

    Europe/Sectors

    Outperformance:Financials (Banks & Insurance)Consumer Staples - Pharma/Health - HPC Food & BeveragesLuxury Goods - Chemicals

    UnderperformanceUtilities, Basic Ressources (positive ST),

    Building Materials, Tobacco, Oil Services

    Neutral (relative accumulation):Integrated oils, Telecoms

    Europe - intermediate outperformanceTargets : Eurostoxx50: 1/ 3000 pts; 2/ 3300

    CAC 40: 4000/4100 pts 2/ 4400

    US: much more limited potentialTarget: S&P 500: 1/ 1550 +/- 2/ 1666

    Global Emerging Markets: outperformance, but range-bound MT

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    INDEXES - TARGETS

    Target 1 Target 2

    S&P 500 1550 1660

    Nikkei 225 11 400 12 875

    DJStoxx 600 315 335

    FTSE 100 6750 /6900 +/-50 7700

    Eurostoxx50 3000 3300

    CAC 40 4000-4100 4400

    Dax 8130 9000

    IBEX 9050 9800/9900

    MIB 18000 19750

    Source: SG Cross Asset Research

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    MSCI WORLD ($)

    Intermediate positive trend

    - exit from the triangularcongestion zone above 340 pts.

    Beyond immediate resistance at360:

    - Target 1/ 385 (triangle target)

    - Potential: 410/420 +15 %A move above 360 should spark

    entry flows with the risk of abubble forming.

    For now, entry volumes areidentifiable in Japan and China.

    For the eurozone: Ireland,

    Portugal, Spain, Italy. SinceJanuary, they have focused onthe banking sector.

    Source: Reuters

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    VOLUMES & ON-BALANCE VOLUMES, VERY CONCENTRATED FOR NOW....

    Japan

    Source: Reuters

    IrelandPortugal

    China

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    VS MSCI WORLD (ADJUSTED FOR FOREX MOVEMENTS)

    Outperforming

    - Europe

    - Emerging

    Underperforming

    - US

    - Japan

    Source: SG Cross Asset Research, Waldata

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    EUROPE: TARGET 1/ 3000 +/- (+10 %) 2/ 3300 +/- (+ 23 %)

    ST resistance: 2800 +/- 10 pts . The risk of sharp downward

    consolidation appears verylimited considering the strengthof the trend.

    ST resistance: 2800 +/- 20 pts

    Target

    1/ 3000 +/- (+10 %) 2/ 3300 +/- pts(+ 23 %)

    But, LT trend remains negative.

    A/B/C type technical recoverysince 2009.

    Source: Reuters

    Eurostoxx50

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    EUROPE

    Eurozone: stress reduction

    - Targeted inflows:solid flowback volumes (Ireland,Portugal, Italy and Spain).

    Indexes: recovery phase out tonext spring

    - Outperformance vs MSCI World

    - Southern Europe: the strongintermediate recovery is notover yet.

    But, the LT trend remainsnegative with the risk of a majorpeak between March/April andJune/July 2013.

    DJStoxx 600 res 1/ 290/292 target 1/ 315 (+10 %) 2/ 345/350 +20%

    Source: Reuters

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    CAC 40 TARGET 1/ 4000-4100 2/ 4400 4500 (+ 20 %)

    Source: Reuters

    CAC 40 CAC 40 in $ + 16 %

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    FTSE 100 : TARGET 1/ + 8 % 2/ +20%

    Source: Reuters

    Vs DJ Stoxx on support

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    EUROPE SECTOR VS DJSTOXX. CHANGE OF TACK

    Telecoms: MT supportaccumulation vs negative

    Source: Reuters

    Energy Equip vs Integrated Oils Risk 1 : 16 %

    Integrated Oils accumulation vs neutralOil services: still negative

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    EUROPE SECTOR VS DJSTOXX. NEGATIVE MT

    Utilities

    Source: Reuters

    Building materialsBasic Ress. (oversold ST but cycle peak in past)

    Real Estate Tobacco risk 1/ v-20 %

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    EUROPE SECTOR VS DJSTOXX. POSITIVE MT

    Food & Beverages

    Source: Reuters

    ChemicalsBanks

    Pharma

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    EUROPE, COUNTRY

    Ireland Target 1/ 3950 2/ 4500

    Source: Reuters

    Greece. First target hit at 1,000. Target 2/ 1,200Austria ATX target 3000

    Italy MIB Target 23 000

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    EUR/USD: THE COMPELLING SIMILARITIES (PRICE TIME AND RANGE) WITH2008/2009 AND 2010/2011 HELPS TO FORECAST 1.3835/1.4250 IN H1

    Indicators and prices bounced off long-term supports(1.20/1.22) and are gearing up to test the five-yearresistance at 1.4250

    Since 2008, each correction/impulsion in abc, lastingeither 6 or 12 months, with impulsions retracing61.8%/76.4% of the previous correction.

    EUR/USD, monthly chart. Source: CQG

    61.8%

    76.4%

    5/6-12 months

    61.8%

    6 months

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    EUR/USD: DEFINITE BUY SIGNALS PROMPTED BUT SHORT-TERM RESPITE ISNEEDED

    Double buy signal by breaking the bearish channel upward (1.2660/20) and confirming the inverted Headand Shoulders pattern (1.2970,potential 1.4250). The weekly momentum indicators and the net non-commercial open interest are at absolute levels and hence need to pause.

    EURUSD, weekly chart. Source: CQG EURUSD, weekly charts. CFTC non-commercial net futures positions. Source: Bloomberg

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    EUR/USD: POSSIBLE PAUSE FIRST BEFORE HEADING FOR 1.3835 AND 1.4250

    Timing suggests a furtherrise into Q1 or even Q2 2013

    The pair might ease back to theHead and Shoulders neckline at

    1.2970 or even 1.2660/20. This will

    enable indicators to ease and gain

    upside potential. The EUR/USD will

    then rally to 1.3835 and 1.4250.

    EURUSD, weekly charts. Source: CQG

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    EURIBOR JUNE13: A COMBINATION OF TWO BEARISH REVERSAL PATTERNS

    Prices should gradually bendtowards the starting point ofthese reversal patterns (99.05)

    Since autumn 11, the euribor has beengradually climbing within a rising wedge,i.e. prices have been enjoying anuptrend but amplitude has beencontracting, hence highlighting thematuring uptrend. Late 2012, the Euriborbroke the wedges lower support line(red dashed line).

    In addition to the wedge, the euriborformed and confirmed a long reversalpattern (Rounding Top). This pattern,albeit rare, materialises at the end of asustained trend.

    EuriborM3-EuriborM4 set towiden towards 48/53

    The spread broke the steep two-year

    tightening channel upwards and mostlikely completed a standard a/b/c/correction last December. Dailyindicators have been diverging fromprices (i.e. moving in the oppositedirection since 35/37).

    ERM3, daily chart (log. scale),Source: Bloomberg

    99.05

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    SCHATZ YIELD: IS STABILIZING ABOVE THE MULTI-YEAR TREND LINE AND AFURTHER RALLY WILL SEE ITS SPREAD TIGHTEN OVER US2Y TO -41/-61

    The monthly indicators have also bounced off the multi-year support line and been diverging since May 10(0.37%), which is also the Double Bottoms potential.

    Schatz, monthly and daily charts. Source: CQG US2Y-EU2Y, monthly chart. Source: CQG

    US2Y-EU2Y spread hit then rejected the key resistance zone of36. Like for every bearish reversal, it saw the formation of a DoubleTop, hence it should narrow towards the support line at -41/-61.

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    EUR 2S5S10S FLY (PAY 5Y): 38 WILL BE DECISIVE

    The 2s5s10s Fly has established itself within the upper part of the long-term range (38-77). However the recentbreak below the rising wedge and the persisting divergences on indicators suggest it will edge lower to 20/16.

    EUR 2s5s10s (pay 5Y),weekly chart.Source: Bloomberg EUR 2s5s10s (pay 5Y),weekly chart. Source: Bloomberg

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    EUROPEAN CORE BONDS: 10Y FRANCE AND THE NETHERLANDS SPREADSOVER GERMANY ARE NOW TESTING CRUCIAL SUPPORTS

    The 10Y OAT-BUND spread has stabilised above the 5-year channel support and the top of summer 11 at 55/45. Itcould potentially be forming a Double Bottom (80/87).

    OAT10Y-BUND10Y, daily chart. Source: Bloomberg GUILDER10Y-BUND10Y, daily chart. Source: Bloomberg

    10Y GUILDER-BUND spread is completing a 4-year standard a/b/c/flat correction. It should establish itself above the channel support at13/10. Indicators have been diverging for a year (25/28).

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    EUROPEAN PERIPHERAL BONDS: MAJOR BEARISH REVERSAL PATTERNSTRIGGERED LAST SUMMER, THE CONVERGENCE WITH CORE IS UNDERWAY

    Most definite configurations are 10Y spreadsbetween Portugal/Spain and Germany...

    ...where a rounding top and a head-and-shoulderspattern were confirmed for the former, and a break

    below the 2-year wedge for the latter.

    OT10Y-BUND10Y and BONOS10Y-BUND10Y daily charts. Source: Bloomberg

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    EUROPEAN PERIPHERAL BONDS: BTP AND 10Y BTP-BUND SPREAD AT KEYSUPPORTS

    10Y spread between Italy and Germany willhave to break below 253 to catch up.

    It is breaking below the 5Y channel support but a clearbreak below 253 will confirm a major Double Top

    pattern.

    The BTP10Y is closing in on the broadening triangle

    support which has been developing since 2006, at

    3.90%. 3.90% is also the steep corrective channel

    support which has been framing the correction since

    late 2011.

    BTP10Y-BUND10Y, BTP10Y (log. scale) daily charts. Source: Bloomberg, CQG

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    MSCI WORLD EMERGING ($) ST PAUSE BELOW 1090, TARGET 1325

    Source: Reuters

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    GOLD SPOT: THE CORRECTION WHICH STARTED IN SEPT. 11 IS COMPLETE

    Indicators suggest Gold hasbottomed out (at 1522 last

    April/May)The rally has been parabolic since2009, i.e. the break above the multi-year channel at 1045. Gold hasnever closed below the monthlymoving average since then. It hasbeen acting as a reliable supportduring all corrections. It is at 1672

    this month.The Stochastic indicator has settledin bullish territory i.e. 70/75% for along-time now (since mid-2003). Ittherefore lends weight to the bullishtrend. Last April/May it pulled back tothe support zone corresponding tothe corrections of October 06 and 08(see arrows) and has tilted upwards.The indicator suggests the correctionended in April/May. Now, theStochastic needs to break above themoving average (see ellipse, redcurve) to spark a sustained buysignal. Gold spot, quarterly chart. Source CQG

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    GOLD SPOT: THE OVERALL LONG-TERM UPTREND PERSISTS, BUT IT ISDE-STEEPENING

    The break below the uptrend since2008 was not fuelled by new sellers

    Like in 2008 (see red ellipse) bearish engulfingpatterns formed in August/September11. After thestrong rally and the all-time high printed inSeptember 11 the opening price was equal to thatof August (at 1803/1827) but Gold reversedsharply, so much that the monthly closing pricewas below the August one (1623). Thecandlestick body in September (i.e. the differencebetween the opening and closing price) engulfsthat of August. The last buyers are swept

    away.However, in this instance, there was no bearish

    monthly close the following month. This suggeststhat, although there was a sudden increase in thebearish force, the bears havent taken over.

    Shallower correction but longer (offsetting)

    Last May, Gold broke below the very steep risingchannel which was containing the rise since late2008 but this signal was not followed by an overallcollapse of the flat price. This break is more likelythe result of the inertia in prices. Indeed, Gold hasbeen moving within a lengthy sideways/flat

    consolidation channel between 1522 and1803/1827 and has briefly re-integrated the formerchannel lately.

    Timing suggests a pause as Gold has beencorrecting lower for four months

    Gold spot, monthly chart. Source CQG

    4-month correction4-month rally

    GOLD EVERY CORRECTION SAW FORMATION OF INVERTED HEAD AND

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    GOLD: EVERY CORRECTION SAW FORMATION OF INVERTED HEAD ANDSHOULDERS. ONE HAS BEEN TAKING SHAPE SINCE DEC.11, TRIGGER IS 1803

    Source: Gold spot (log) and Dollar index, weekly charts. Source CQG

    A Head and Shoulders is also being formed on the Dollar Index and will trigger in break of 79.

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    GOLD: THE NET OPEN INTEREST REMAINS OVERALL LONG, LIKE PRICES ITBOUNCED OFF SUPPORT LAST MAY

    Gold and CFTC net non-commercial: support hitlast May

    Source: Bloomberg, daily chart Source: Bloomberg, daily chart

    Gold and Risk Reversal 1M: testing interim support

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    LONG-TERM SCENARIO: GOLD IS DUE TO HIT 1803/1921 IN H1 2013. IT MAY BETHE FINAL WAVE THOUGH.

    The correction from August 11to May 2012 is most likely awave 4//

    This correction aimed to retrace the rallyfrom July 09 up to August 11 top. Goldhit the 38.2% retracement 3 times at1522. These corrections are most of thetime shallow and interpreted as a pausewithin the overall up trend.

    But the rally to come may bethe final one for a little while,

    hence completing a 5// wavesequence

    Given the various points outlined in theprevious pages it looks like the up trendremains in place but starting to run outof steam.This supports the idea that a final upwave (labelled 5//) has been unfoldingsince last May but sometimes this finalwave can take shape with various forms:either standard or extreme i.e. thepanic rally like in August 11 or a failure.In the last instance, Gold would hit theall-time high at 1921 or even a touchhigher but would reverse downward verysoon after.

    Gold spot, weekly charts. Source CQG

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    BRENT: IT LOOKS LIKE A PULLBACK.

    The steep bullish dynamic since 2008 is broken, crude oil near the upper part of the 1.5 year range

    Brent active monthly continuation chart. Source: CQG

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    BRENT: RANGE-BOUND CONFIGURATION

    Brent (June13) is drifting higher towards the upper part of the 2-year range at 113 and 118 but with a lackof momentum.

    Brent June 13, weekly chart. Source: CQG Brent June 13, weekly chart Source: Bloomberg

    EUR/GBP MAJOR ONG TERM SUPPORT HIT AT 0 0/0 690 PAIR IS

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    EUR/GBP: MAJOR LONG-TERM SUPPORT HIT AT 0.7750/0.7690. PAIR ISHEADING TOWARDS THE 5Y CHANNEL RESISTANCE AT 0.8640/0.8780

    The pair hit a major supportlast summer at 0.7750/0.7690.Only a break above the 5-yearchannel resistance/pennantat 0.8640/0.8780 will reversethe 4-year bearish trend.

    0.7750/0.7690 is the 50%retracement, but also the pennantslower limit in place since 2008.Monthly leading indicators arereversing up.

    The weekly TD sequential indicator,which aims to identify priceexhaustion and spot marketbottoms/tops, prompted a buy signaland highlights the risk zone of 0.7690(dashed pink line). Such a buy signaloccurred in 2010, when theEUR/GBP enjoyed a rally towards

    the pennants upper limit and thereference level of the previousdowntrend (red dashed line). Whenapplying the same rule, the objectivefor the current rally is 0.8780.

    EURGBP, monthly chart. Source: CQG

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    EUR/GBP: DEFINITE BULLISH SIGNALS BUT RISK OF A SHORT-TERM PAUSE

    Closing in on initialsignificant resistances

    The pair broke above the steepcorrective channel, thereby validating

    the inverted Head and Shoulders

    pattern with a break above

    0.8160/0.8230 and reached the

    potential at 0.8580.

    The weekly momentum indicator

    (here weekly Stochastic), which aimsto detect any possible

    oversold/overbought configuration,

    hit the peaks of 2011, 2009 and

    2008. A consolidation is overdue.

    EURGBP, weekly chart. Source: CQG

    USD/JPY THE BULLISH TREND REVERSAL PREVIOUSLY SPOTTED IS TAKING

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    USD/JPY: THE BULLISH TREND REVERSAL PREVIOUSLY SPOTTED IS TAKINGPLACE

    Major support reached at 75.50followed by a one-yearaccumulation which formed a

    major bottom reversal (InvertedHead and Shoulders)

    The pair reached the long-termdescending channel support and thecorrection has been desteepening eversince. The USD/JPY breached theresistance line (red dashed line) withindicators diverging since 2009.The pair is most likely retracing the 6-

    year correction and should head towardsthe graphic levels of 95.00, mostimportantly to 100.00/101.75, that is thecongestion of 2000 to 2008 and thebeginning of massive yen strength.

    Despite the parabolic rally, apause will have to take place(to 85.55)...

    ...as monthly indicators are at resistanceand the pair is nearing the potential forthe inverted Head and Shoulders(91.50/92.00).

    USDJPY, monthly and weekly charts. Source: CQG

    EUR/JPY 4 YEAR CORRECTION COMPLETED BY THE BREAK ABOVE THE

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    EUR/JPY: 4-YEAR CORRECTION COMPLETED BY THE BREAK ABOVE THEFALLING WEDGE

    The pair hit the lower limit ofthe exhaustion pattern

    (Wedge) then broke above it(104.60)

    It hit both the wedges lower limit andthe Fibonnacci projection at 92.80.The break above the wedges upperlimit prompted a definite buy signalwith monthly indicators flipping overinto positive territory for the first time

    since 2008. The current rally aims to

    retrace the 4-year correction,with projected targets at132/138.77 but aconsolidation is close athand...

    ...as the pair is nearing the resistanceof 123.37 which is composed of April

    11 tops and 38.2% retracement.

    EUR/JPY, monthly and weekly charts Source: CQG

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    NIKKEI 225: NEGATIVE VS MSCI WORLD RESISTANCE 1/ 11,300 2/ 12,680

    Source: Reuters

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    PAIRS WHICH WILL MOST LIKELY CATCH UP: EUR/NOK AND USD/NOK

    The EUR/NOK hit the lower part of the long-term broadeningtriangle and is completing a 4-year correction. The break abovethe falling wedge at 7.50/67 will prompt definite buy signals.

    EUR/NOK, monthly and weekly charts. Source: CQG USD/NOK, weekly chart. Source: CQG

    The USD/NOK is potentially forming an inverted head andshoulders pattern. The break of 6.00/6.10 will prompt a double buysignal (head and shoulders confirmation and the multi-yearchannel resistance).

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    PAIRS WHICH WILL MOST LIKELY CATCH UP: EUR/AUD

    The pair hit a multi-year low at 1.17/1.16, The TD sequential indicator also prompted a monthly buy signal and highlights the risk zone of1.17. A major inverted head and shoulders pattern (potential at 1.4270) is being formed and will be confirmed by a break above 1.3027.

    EUR/AUD, monthly charts. Source: CQG, Bloomberg EUR/AUD, weekly chart. Source: CQG

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    PAIRS WHICH WILL MOST LIKELY CATCH UP: EUR/CZK

    The long-term bearish signals are gradually receding. The EUR/CZK is slowly forming a bullish pattern (Cup andHandle). This kind of configuration happens after a sharp but brief rally (2008/2009) and is followed by a prolongedconsolidation. 25.90 will confirm the pattern.

    EUR/CZK, monthly chart. Source: CQG, Bloomberg EUR/CZK, weekly chart. Source: CQG

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    US: S&P 500 TARGET 1/ 1550 (5%) 2/ 1660 (13%)

    The recovery trend since 2009still has all the characteristics of

    a major technical recovery withthe minimum target at 1550+/-10pts (weekly closing 1575 ondaily extremes) and immediatesupport at 1470/65, S2 1340.

    The target for this major Bwave, initially set at +/- 1550 is

    likely to increase to 1660/70 bynext June/July.

    Positive factors prevail:Positive Advance/Decline, newhistorical peak on the Russel2000, and the Dow Transport.

    Source: Reuters

    US HIGH YIELD (5Y): IS EDGING HIGHER TOWARDS PRE-CRISIS LEVELS BUT

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    US HIGH YIELD (5Y): IS EDGING HIGHER TOWARDS PRE-CRISIS LEVELS BUTTHE UPTREND IS RUNNING OUT OF STEAM

    104.45/105.00 is the mainresistance region to watch:

    this is the all-time high (thepre-crisis level) and the topfrom early 2011.

    Overall, the index has been evolving

    within the upper part of the long-term

    range, between 86.50 and

    104.45/105.00. The indicators are

    toying with the overbought zone.

    Similarities between the

    current uptrend and that of

    mid-2010/early 2011

    Both were contained within a rising

    channel, the current uptrend could

    also be developing within a fallingwedge. The wedge underlines the

    levels of 105.00 and 97.00.

    High Yield (Markit CDX 5Y). Source Bloomberg

    UST10Y IN YIELD: HIT THE MULTI-DECADE DECLINING CHANNEL SUPPORT

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    UST10Y IN YIELD: HIT THE MULTI-DECADE DECLINING CHANNEL SUPPORT,MONTHLY INDICATORS ARE FLASHING EARLY BULLISH SIGNALS

    1.38%-1.00% is the majorsupport zone...

    ...made up of the long-term channelslower limits as well as the steeper

    one which has been developing since

    2007.

    The monthly MACD also hit support

    (last time being early 2009) and is

    breaking the signal curve (red line as

    indicated by the blue arrow).

    UST10Y in yield, monthly chart. Source: CQG

    UST10Y IN YIELD: IS BOTTOMING OUT BUT THERE COULD BE SOME HICCUPS

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    UST10Y IN YIELD: IS BOTTOMING OUT BUT THERE COULD BE SOME HICCUPSALONG THE WAY

    The fall in yield since early2011 is over. UST10 hasentered into theaccumulation phase in otherwords the primary uptrend isslowly building, but it willcertainly be marked by priceconsolidation.

    A clear and visible 5-wave sequence

    is complete and UST10Y (in yield)

    broke above the steep resistance line

    in place since early 2011 (at 1.25%).

    It has gradually recovered towards

    the first resistance zone at

    2.00/2.09% which consists of the

    23.6% retracement of the correction

    form early 2011 to July 2012 and of

    the congestion of September 11 toMay 12.

    The weekly RSI broke the resistance

    line since 2011 too (red dashed line)

    but is approaching initial resistance.UST10Y in yield, daily chart. Source: CQG

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