Best of the Week
Most Popular
1.Crude Oil Price Trend Forecast 2016 Update - Nadeem_Walayat
2.Will Deutsche Bank Crash The Global Stock Market? - Clif_Droke
3.Gold Price In Excess Of $8000 While US Dollar Collapses - Hubert_Moolman
4.BrExit UK Economic Collapse Evaporates, GDP Forecasts for 2016 and 2017 - Nadeem_Walayat
5.Gold Stocks Massive Price Correction - Zeal_LLC
6.Stock Market Predicts Donald Trump Victory - Austin_Galt
7.Next Financial Crisis Will be Far Worse than 2008/09 - Chris_Vermeulen
8.The Gold To Housing Ratio As A Valuation Indicator - Dan_Amerman
9.GDXJ Gold Stocks - A Diamond in the Rough - Rambus_Chartology
10.Gold Boom! End Game Nears As Central Banks Buying Up Gold Mining Companies! - Jeff_Berwick
Last 7 days
This Commodity Has Perked Up its Investors' Portfolios - 27th Sept 16
Charting the Continuing Gold Market Correction - 27th Sept 16
Stock Market Crash and Recession Indicator Warning: Extreme Danger Ahead - 27th Sept 16
Financial Markets and FX Setups 27th Sept - 27th Sept 16
Crude Oil, Forex and Stock Market Trend Forecasts - 27th Sept 16
Why There is Trump - 27th Sept 16
Save Up to 70% in Shopping Expenses for Daily Items - 27th Sept 16
Gold’s Moving Averages and Long-Term Outlook - 26th Sept 16
September Stock Market - The Not So Silent Demise of Deutsche Bank - 26th Sept 16
SPX sell signal confirmed - 26th Sept 16
SPX is testing the next level of support - 26th Sept 16
Outrageously Entertaining US Presidential Campaign Final Stages - What Happens Next? - 26th Sept 16
BoJ, FOMC and Where To Now? - 26th Sept 16
Stock Market New All Time Highs Next - 26th Sept 16
Why Trump Will Win US General Election 2016 Prediction Forecast - 26th Sept 16
Martial Law Rolls Out Across the US As Jubilee Nears - 26th Sept 16
Stock Market More Correction Likely - 25th Sept 16
US Presidential Election Forecast 2016 - Trump Riding BrExit Wave into the White House - 25th Sept 16
US Economy GDP Growth Estimates in Free-Fall: FRBNY Nowcast 2.26% Q3, 1.22% Q4 - 24th Sept 16
Gold and Gold Stocks Corrective Action Continues Despite Dovish Federal Reserve - 24th Sept 16
Global Bonds: Why Our Analyst Says Things Just Got "Monumental" - 24th Sept 16
Where Did All the Money Go? - 23rd Sept 16
Pension Shortfalls Could Be 4X To 7X Greater Than Reported - 23rd Sept 16
Gold Unleashed by the Fed - 23rd Sept 16
Gold around U.S Presidential Elections - 23rd Sept 16
Here’s Why Eastern Europe Is Doomed - 23rd Sept 16
Nasdaq NDX 100 Big Cap Tech Breakout ? - 23rd Sept 16
The Implications of the Italian Banking Crisis Could Be Disastrous - 22nd Sept 16
TwinLakes Theme Park Summer Super 6 FREE Return Entry for Real? - 21st Sept 16
Has the Silver Bullet Run Out of Fire Power? - 21st Sept 16
Frack Sand: The Unsung Hero Of The OPEC Oil War - 21st Sept 16
What’s Happening With Gold? - 21st Sept 16
Gold vs. Stocks and Commodities, Pre-FOMC - 20th Sept 16
BrExit UK Inflation CPI, RPI Forecast 2016, 2017 - 20th Sept 16
European banks may be more important than the Fed this week - 20th Sept 16
Gold, Silver, Stocks and Bonds Grand Ascension or Great Collapse? - 20th Sept 16
Mass Psychology in Action; Instead of Selling Gilead it is Time to Take a Closer Look - 20th Sept 16
Hillary - Finally Well Deserved Recognition for Deplorables - 20th Sept 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The Power of the Wave Principle

U.S. Dollar Foreign Currency Pairs Analysis

Currencies / Forex Trading Jan 09, 2012 - 04:28 AM GMT

By: Tony_Caldaro

Currencies

Best Financial Markets Analysis ArticleAs we noted in the most recent weekend update, there have been some developments in the long term Secular/Supercycle patterns of the currencies. As you are aware, the USD Secular trend, or Supercycle if you will, has been bearish against most foreign currencies since 1985. We have reason to believe this ended at the 2011 price low of 72.70 DXY. The USD should now be in a Secular bull market. Initial estimates suggest the DXY should reach 140 by 2018.


In our last report, we detailed how the 17 year cycle appeared to be peaking with a blowoff top in the CHFUSD pair. The CHFUSD is our bellwether for the currency cycles. We also illustrated the CADUSD was peaking right at our targeted zone of 1.06, and the JPYUSD pair was nearing our targeted zone of 1.33. The CHFUSD blowoff looked similar to the JPYUSD blowoff top in 1995, which also ended a Cycle wave. 1995 completed a Cycle wave [A], and 2011 completes a Cycle wave [C] and the total Supercycle wave since 1985. See EURUSD chart below. Long term currency waves move in ABC’s.

In the past few weeks the USD has confirmed an OEW long term uptrend, and the EURUSD an OEW long term downtrend. This confirms our previous analysis and we expect most foreign currencies will be declining against the USD for the next seven years. Now to the specifics.

The CHFUSD pair peaked in 2011 at 141.44. Since then it has declined steadily and is currently around 105. With the Supercycle top completed, as noted on the chart, we expect the CHFUSD to continue to decline until it hits around 96 this year. Then we should see a bear market rally to around 118-120 during 2013. After that a decline to around 70, or lower, into 2018. These two support levels are noted on the monthly chart by blue lines.

The EURUSD pair peaked in 2008 at 160.20. Since then it completed another set of ABC Primary waves with lower and lower highs. This is somewhat similar to the price action in the 1990′s. With a long term downtrend now confirmed in this pair, we expect the current decline to continue until it hits around 116. A bear market rally should follow at that point into the 129-133 range by 2013. After that a decline to around 82, or more, into 2018.

The USD/DXY bottomed in a Primary wave A in 2011 at 72.70. With the long term uptrend now confirmed we expect the DXY to rally to around 87 in 2012. After that it should decline, with the bear market rallies in the CHF and EUR, to around 77 in 2013. Then we expect a massive shift out of all foreign currencies and commodities into the USD. This USD bull market should continue for about five years as the DXY hits 140, or more, in 2018. During this 2013-2018 time period there could be a reorganization in the Eurozone, and/or a resetting of the world’s currencies. The USD, and then USD denominated assets should be in great demand between 2013-2018.

The JPYUSD pair appears to have topped at the recent 132.18 high. Thus far, it has not declined much while the CHF and EUR have headed lower. This appears somewhat similar to the early bull market waves after the last Supercycle low in the USD in 1978. Then the JPY and CHF were declining while the DMK and GBP held steady. The USD/DXY rose during the first year after the low, but the rally was kept in check by the DMK and GBP. This time around, it appears, the JPY, GBP and CAD are keeping the DXY in check during its first rally. In 2011 the CHFUSD appeared to be the most overvalued currency in the world. In 2012 the JPYUSD appears to have that distinction. When this pair does start to breakdown we’re expecting a price low of around 74, or lower, before 2018.


CHARTS: http://stockcharts.com/...

http://caldaroew.spaces.live.com

After about 40 years of investing in the markets one learns that the markets are constantly changing, not only in price, but in what drives the markets. In the 1960s, the Nifty Fifty were the leaders of the stock market. In the 1970s, stock selection using Technical Analysis was important, as the market stayed with a trading range for the entire decade. In the 1980s, the market finally broke out of it doldrums, as the DOW broke through 1100 in 1982, and launched the greatest bull market on record. 

Sharing is an important aspect of a life. Over 100 people have joined our group, from all walks of life, covering twenty three countries across the globe. It's been the most fun I have ever had in the market. Sharing uncommon knowledge, with investors. In hope of aiding them in finding their financial independence.

Copyright © 2012 Tony Caldaro - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife