USD Continues to Surge against Euro and Yen

Steve Miley

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