CURRENCY WATCH EUR/USD
As stated in the last three years of articles for FX Trader Magazine, our long-term forecast continued to stress the top in the EUR/USD since 2009 [at 1.4740], as well as the forecast subsequent declines to 1.1555 for March 2014, and 1.0460 for October
2016 in the ongoing seven-year Dollar Bull Market Forecast. By rallying from the low to complete the monthly close back above 1.1305 in June 2017, we crossed our “line in the sand” and terminated the Dollar Bull Market.
Te impact on the EUR/USD has been a neutralizing of both the bearish
FX
long-term momentum as well as a neutralizing of most other technical aspects in the currency pair. Te result was the bounce in the Euro to the 1.2040 top of the resulting medium- term consolidation view [1.0815 – 1.2040].
Te monthly close again in December above 1.1810 has further improved the neutral medium-term technicals and now yields a weak retest of the 1.2165 top of the resulting higher, medium- term con-solidation view [1.1445 – 1.2165] through March 2018. As in the last quarterly article, only a monthly close in EUR/USD above 1.2165 would nudge medium-term and long-term technicals to neutral/ bullish and yield a rally to 1.3190 over the subsequent twelve months.
GBP/USD EUR/USD GBP/USD
When our bearish forecast for GBP/ USD was completed with the decline to the 1.3655 long-term objective in June 2016, the further deep decline to 1.1950 developed the strongest complex medium-term divergences in a year. Te rally that ensued from 1.1950 to our 1.3180 medium-term corrective objective for August 2017 alleviated all of the strong complex divergences of the previous year. We continue to forecast a weak further rally to 1.3810, out to February 2018 from October 2017, still in the higher, volatile medium-term consolidation [1.2770 – 1.3990] through March 2018. Only
a monthly close back FX TRADER MAGAZINE January - March 2018 15
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