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TECHNICAL ANALYSIS

Dollar Long-Term Technical Outlook

Dollar, Long-Term, Technical Outlook, Technical Analysis, fx trader, forex

05 Feb 2016

Long-term Trend Remains Higher

As in the previous three years’ outlooks, we have been stressing the bullish long-term outlook for the U.S. Dollar. Although we have declined in the EUR/USD [for example] to only 1.0460 shy of the .9890 long-term objective for 2015, the forecast corrective rally shy of 1.1520 for October 2015 has alleviated various divergences from the previous decline, allowing for a continuation of the long-term Dollar rally.

In addition to our Dollar focus in EUR/USD, USD/JPY, GBP/USD, and USD/CHF, we are again highlighting the USD/RUB as a potential mover and strong influence on other markets after our forecasts of an approximately 40% range for 2015 evolved as discussed a year ago.

Lastly, we  will  again forecast Gold for the coming year, as the one commodity most correlated to the U.S. Dollar. Our forecast, which has been steadfastly bearish on Gold, will change as we move late into 2016.

 

EUR/USD

Dollar, Long-Term, Technical Outlook, Technical Analysis, fx trader, forex EURUSD

In a continuation of the previous forecasts for the EUR/USD, we have stressed our very long standing view of the bearish seven-year cycle for the EUR/USD. Our long-term forecast has continued to stress a top in the EUR/USD since 2009 [at 1.4740], as well as the forecast the subsequent decline to 1.1555 for March 2014. The decline to only 1.0460 [ shy of the .9890 ongoing long-term objective of the last three years], and retest of 1.1715 dampened bearish long-term momentum for the EUR/USD, but did not terminate the forecast decline. We are forecasting only a weak retest again of 1.1520 into February 2016, then a resumption of the decline still to .9890, out to May 2016 from January 2016. We are forecasting a subsequent further decline to 93.30 strong long-term support into October 2016 in an even stronger dollar outlook than the previous 5 years. Only a monthly close in EUR/USD back above 1.1520 would dampen the bearish long-term technical aspects of the market and result in a strong rally to 1.2230 over the subsequent six months.

 

GBP/USD

Dollar, Long-Term, Technical Outlook, Technical Analysis, fx trader, forex GBPUSD

GBP/USD has been technically medium-term neutral for five years, in an increasingly neutral, broad, long-term outlook. The massive wedge formation of the last 30 years has now tightened relatively to [1.4395 – 2.0145]. After the forecast decline to 1.4815 and rally back to 1.5930 left the long-term technicals eroding further in neutral/bearish, we continue to forecast the further decline to 1.4270 through February 2016. We are now forecasting a subsequent further decline to 1.3655 into October 2016 in a bearish medium-term outlook into yearend 2016 [1.3655 – 1.5930]. Only a monthly close back above 1.5955 would completely neutralize the bearish long-term momentum and result in a weak retest of 1.6670 over the subsequent three months.

NOTE: EURGBP retest .7420 then .6835 into October 2016

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