Our weekly chart computer model targets a steeper fall to 7076 as the September cycle low. Rallies are not likely to go much above 8528 on the June contract, and cyclical strength should end by March 27th. The Deutschemark has been stabilizing recently but we expect the downtrend to resume. Economic data his been mixed. In early March, industrial production and manufacturing orders were revised sharply downward even as plant and machinery orders were increasing.
Unemployment continues to grow to record levels.
The falling DM has probably helped spur growth, although not enough to turn this economy around. Moreover, should President Kohl not be re-elected in 1998, this would further jeopardize Germany's push for EMU membership. Fundamentals suggest the DM falling to the 57.15 region short term, with key support at 57.47 on the June contract. Rallies are not likely to go beyond 62.00, and monthly charts and cycles suggest that the market will fall to 52.65 and eventually 50.86 before downside activity is complete. Cycle highs peak into the March 17-19 time window.