CURRENCY WATCH technicals neutral
FX from bearish. Chart 3: USD/JPY Monthly bar chart
We are also eroding the long-term technicals for the last three months within neutral/bullish, leaving USD/ CHF at the .8890 critical monthly close. We continue to forecast a rally in USD/CHF to 1.0525 through May 2014. We are forecasting a subsequent strong rally to 1.3085 into January 2015 in our ongoing long-term bullish outlook. Only a monthly close below .8890 at the end of January or later 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, is now resting also at the critical monthly close, in this case 1.2230. We are forecasting a rally to 1.2650 through March 2014 in a neutral/bullish medium-term outlook. Only a monthly close below 1.2230 would terminate the forecast rally and result in a broad neutral/ bearish medium-term outlook [1.1740 – 1.2390] over the subsequent six months.
Chart 4: USD/CHF Monthly bar chart
NOTE: EUR/JPY is at very strong long-term resistance at 141.05, still with bullish long-term momentum. We are forecasting a further rally to 148.10 into March 2014, then a broad, medium-term consolidation [123.30 – 148.10] into March 2015.
USD/CHF OUTLOOK Since the days of trading currencies
interbank through the 1980’s and early 1990’s, USD/CHF has always been my barometer for imminent changes to the U.S. Dollar. It is because of this respect for USD/CHF that I am presenting the only threat to the bullish outlook for the U.S. Dollar. Aſter the rally to .9970 in July 2012 from the .7070 extreme low, the subsequent 12 months of sideways consolidation only leſt the long-term
In summary, we continue to be bullish on the U.S Dollar for the next 15 months. EUR/USD, GBP/USD, and USD/JPY are bullish in the forecast multi-year trend to come. Our only concern is USD/CHF, which continues to look residually weak aſter the corrective decline to .8890. Good luck and good trading!
Keith Raphael FX TRADER MAGAZINE January - March 2014 35
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