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USD Continues to Surge against Euro and Yen

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The US Dollar has exhibited an extremely strong technical tone against nearly all of the Major global currencies since the US Presidential election result.

In particular, US$ gains versus the Euro and Japanese Yen has produced an intermediate-term bearish EURUSD forecast and bullish USDJPY forecast into late November and late 2016 (and beyond).

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EURUSD

A rebound failure Friday, again capped by resistance at 1.0660/80 after a probe Thursday just below the key 1.0520 low from December 2015, setting the risk lower again for Monday.

For Monday/ Tuesday:

  • We see a downside bias through 1.0517, then 1.0500 and maybe critical 1.0459 (the 2015 multi-year low).
  • However, a push above 1.0628 aims for 1.0660 and 1.0680.

Furthermore, the probe of 1.0520 reinforces the aggressive sell-off through 1.0987 after the Wednesday US Presidential election result, enhancing the intermediate-term bearish theme.

Short/ Intermediate-term Outlook – Downside Risks:

  • We see a negative tone with the bearish threat to 1.0520 and maybe parity (1.0000).

What Changes This? Above 1.1300 signals a neutral tone, only shifting positive above 1.1366.

Weekly EURUSD Chart

EURUSD Chart

USDJPY

Once more another new cycle high Friday through a strong barrier at 113.80 and despite a setback, support at 112.70 is intact, to leave upside pressures intact from the recent push above the 50% retracement of the entire 2015-16 sell-off at 112.42.

This keeps the risk higher again Monday and further enhances the intermediate-term bullish trend.

For Monday/ Tuesday:

  • We see an upside bias for 113.90; break above here aims for 114.44.
  • But only below 112.53 shifts to a more negative tone to open risk to 112.03.

Short/ Intermediate-term Outlook – Upside Risks:

  • We see a positive tone with the bullish threat to 113.80 and 114.88.
  • Above here targets 115.59, 117.53 maybe as high as 120.00/10.

What Changes This? Below 108.51 signals a neutral tone, only shifting negative below 105.99.

Daily USDJPY Chart

USDJPY Chart