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FX CURRENCY WATCH


58.10 strong medium-term support through December 2018, still within the broad, neutral medium-term outlook into the second quarter of [55.25 – 72.85]. Only a monthly close back below 58.05 (nudging medium- term techs back to neutral/bearish and commencing a decline to retest 49.55 over two months) or a monthly close above 72.85 (resulting in a rally to 80.80 over three months) would alter the still neutral medium-term outlook for the next eight months.


Te 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 believe that the extended consolidation of the U.S. Dollar, now into the first quarter of 2019, will result in oil remaining neutral and continue to normalize the correlations that were lost in the volatility and uncertainty that had been trademarks of the previous three years.


BITCOIN/USD


As stated in the last three quarters of articles of our Bitcoin forecasts, the emergence of Bitcoin has been intriguing to me as a 38-year veteran of the currency markets. I have been


30 FX TRADER MAGAZINE October - December 2018 SUMMARY


The U.S. Dollar continues to build its long-term top, with the typical, six months ago, sharp move down


able to provide technical market forecasting for all assets for these many years, but I have always steered clear of highly illiquid assets due to their high volatility. Without condoning crypto-currencies or giving them more credence


than they deserve


in their infancy, I have decided to provide an initial forecast.


Te amount of data and only a three- year timeline of data is


insufficient


to make the type of longer-term forecasts to which I am accustomed. Nonetheless, aſter the meteoric rise to 18720, our forecast decline to retest 9425 for March 2018, 5975 previously forecast for May 2018, and now the corrective rally to 8875 for August 2018 leſt medium-term techs waning to neutral. We are forecasting a further decline to 5270 through November 2018, then higher to retest 7710 through January 2019 within a lower, very broad, medium- term outlook [5270 – 10555] into March 2019. Only a monthly close above 11530 (yielding 16460 strong medium-term resistance over the subsequent two months) or a monthly close below 5925 (increasing bearish momentum and yielding a retest of 4085 strong medium-term support over a month) would alter the now neutral from ongoing bearish medium-term forecast.


followed by consolidation. The key feature of this last quarter was the significant extension of the Dollar top-building process, now extended an additional four months. Any significant


bearish U.S. Dollar


momentum will not develop until the next move through the middle of 2019 to 1.3190. In addition, after


the forecast rally in USD/


JPY to 111.40 and divergent extension toward 113.40, we continue to forecast the subsequent decline again to 104.30 into 2019, reinforcing the imminent new leg down in the Dollar.


In commodities, Gold, which completed its longer-term bottom in 2017, will continue to consolidate into early next year before higher to 1525 into the beginning of 2020, in consort with the EUR/USD rally. Crude Oil will now flounder in a broad range [55.25 - 72.85] after achieving the long-term objective of 69.20. Lastly, and in the big picture, USD/CHF and EUR/CHF both continue to indicate that the final stages of the forecast seven-year bull market occurred as forecast in the last quarter of 2017. After a continuation of the year-long top building in the Dollar and bottom building in commodities into 2019, we continue to forecast an emergence of a new bull market in commodities into early


2020, reversing recent trends. Good luck and good trading!


Keith Raphael President


Crosscurrents Investment Advisory


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