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USD/JPY

Mid-Year, Dollar, View, Remains, Bullish, Brexit, exacerbates, failed, correlations, volatility, through 2016, Currency Analysis, fx trader, forex usd_jpy.jpg

After the monthly close in February 2016 below 115.55 confirmed our view of the long-term top in USD/JPY at 124.65, the strong decline again through our 107.80 May 2016 objective to 98.95 in June left medium-term the technicals waning in neutral/bearish from bearish. We are forecasting a rally to retest only 111.45 through November 2016 in a deeper, less bearish medium-term outlook into early 2017 [100.75 – 111.45]. Only a monthly close back above 116.90 in USD/JPY would neutralize the neutral/bearish outlook and revert to a more neutral medium-term outlook [110.60 – 124.65] into February 2017.

EUR/JPY

Mid-Year, Dollar, View, Remains, Bullish, Brexit, exacerbates, failed, correlations, volatility, through 2016, Currency Analysis, fx trader, forex eur_jpy

As significant a currency pair as the EUR/USD or USD/JPY, EUR/JPY will also dominate currency trading through the balance of 2016. We continue to forecast a high degree of volatility as the Dollar forms a volatile bottom against the Yen and the Dollar appreciates against the Euro. The monthly close below 125.35 forecast for May 2016 further confirmed our longer-term forecast of the decline to 111.10 through September 2016, and due to Brexit volatility, has been prematurely achieved in June. We are forecasting a subsequent rally to retest only 117.20 through October 2016 in a broad, sharply lower outlook [109.55 – 121.70] into early 2017. We continue to forecast a subsequent bottom to form at 111.10 through January 2017 in a medium-term consolidation into February 2017. Only a monthly close back above 122.20 would neutralize the less bearish long-term momentum and yield a choppy medium-term consolidation [115.55 – 134.60] over the subsequent six months.

USD/CHF

Mid-Year, Dollar, View, Remains, Bullish, Brexit, exacerbates, failed, correlations, volatility, through 2016, Currency Analysis, fx trader, forex usd_chf

The Swiss Franc remains the bellwether, proactive currency. The forecast decline from 1.0330 to .9475 forecast for March 2016 but completed in May 2016 once again mixed the medium-term and long-term technicals to neutral. We continue to forecast the subsequent, gradual rally to only 1.0440 into October 2016 in the waning bullish long-term outlook for USD/CHF through 2016. Only a monthly close back below .9475 would terminate the forecast rally and commence a decline to .8240 strong long-term support over the subsequent five months.

NOTE: EUR/CHF, the secondary but important directional indicator to USD/CHF, has failed at 1.1105 and eroded the medium-term technical further to neutral/bearish. We continue to forecast a decline to retest 1.0235 into October 2016 [a further 6% decline] which underscores the waning strength evident in USD/CHF. In the big picture, this is also a strong indication of the waning long-term bull market in the Dollar that we believe culminates into yearend 2016.

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