Re-assessments of the debt/GDP ratios of the troubled EZ economies, published on Thursday from the European Commission, is causing a ramping up of the CDS rates on sovereign debt for all of the PIIGS countries.

Yesterday I suggested that EUR/GBP was destined to test the January low - that has already been tagged and the next target would appear to be the lows around 0.85 from the summer of 2009.




The sector fund for broker/dealers, IAI, appears to be developing a bearish pullack formation and the current mood of increased focus on bank regulations - including the remarkable proposals from the IMF announced yesterday - suggest that this sector could be facing stronger headwinds in the future than the cheerleaders for the sector have presently discounted.



The 240-minute chart for Germany’s DAX is indicative of a lower high/double top pattern and the bottom of the cloud would be a near-term target.



One of the FX charts which caught my attention this morning is the long-term monthly chart for EUR/CAD which, as can be seen, is now at historic lows - reflecting as much the troubled euro as well as the strength of one of the world’s key commodity currencies. No specific action is recommended although short-term scalping opportunities could be quite lively.



The Nikkei 225 dropped by 1.2% in Asian trading and the EWJ sector fund looks technically vulnerable from an Ichimoku perspective



Heavy volume was associated with the 1.6% drop in BIK, one of the ETF’s which track the BRIC economies, and the close dropped below the Kijun Sen level. The hammer pattern suggests that there could be room for near term recovery but the chart looks a little heavy with downside targets in the longer term to the $24 level.



Clive Corcoran is the publisher of TradeWithForm.com, which provides daily analysis and commentary on the US stock market.