FX CURRENCY WATCH OIL OIL
As discussed in the last six quarters of articles in FX Trader Magazine, the plunge in Crude Oil from 108, through the 33.20 long-term objective for January 2016 to 26, produced the strongest medium- term divergences in 15 years [stronger than from the plunge in 2009]. In addition, the rally through and monthly close above 56.55 improved the medium-term momentum to neutral/bullish. As a result, we continue to forecast a rally through 62.60 strong long-term resistance [forecast for February 2018] to retest 69.20, still in April 2018, in the waning, neutral/bullish medium-term outlook through the second quarter of 2018 [51.90 – 69.20]. Only a monthly close back below 51.85 would avert the forecast rally and commence a retest of 37.75 over four months.
BITCOIN/USD
a decline to retest 1273.10 through May 2018, then retest again of 1374 through October, still within the ongoing medium-term consolidation [1238
– 1374] into November
2018. We continue to stress that this consolidation is the final formation of the long-term bottom for Gold for a relatively shallow rally to 1525 throughout the first half of
32 FX TRADER MAGAZINE April - June 2018
2019. Only a monthly close back below 1222 (nudging medium- term momentum back to neutral/ bearish and commence a decline to retest 1147 over the subsequent four months) or a monthly close above 1374 (commencing the rally to only 1525) would alter the neutral medium-term outlook into early 2019.
The impact of the price of Crude Oil on other assets has varied and diverged from normal levels of correlation for the past year and a half. In part, it was a question of whether the “tail [Crude Oil] is wagging the dog [ U.S. Dollar]”. I continue to believe that the weak rally in Crude Oil to 69.20 was the result of and correlated with the further weak decline in the Dollar against the Euro into April 2018. I also continue to believe that the second, and now third quarter of 2018 will
continue to normalize
the correlations that were lost in the volatility and uncertainty that
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