2020 Forex forecast 31 Jan – 7 Febr

2020 Foreign Exchange forecast 31 Jan – 7 Febr

covering USD Index, EUR/USD, GBP/USD, USD/JPY, GBP/EUR

USdollar Index Weekly Dollar Index Price Risk Analysis Forecast

(Previous week in brackets)

USD Index LT-M MT-W ST-D
97.36 (97.88)
Trend ↓ (↓) ↑ (↑) ↓ (↑)
% Risk
Weight
58 (60) 50 (43) 65 (88)
Allocation 100% (100%)


The USD index traded a little higher in the early part of the past week before sinking 0.5% on simple month-end trader book squaring it seems. We continue to strongly favor a position that protects against further Dollar weakness. No Change.

Last week: We stay with the Monthly Long term risk weight trend which is down. We cannot exclude another 1% advance and the dollar looks like it could stay in this price range for a while longer. Full dollar long exposure should remain covered until the LT trend changes in line with ST confirmation. No Change

EUR/USD FX live price, Weekly EURO vs US Dollar Price Risk Analysis Forecast

(Previous week in brackets)

EUR/USD LT-M MT-W ST-D
1.1088 (1.1020)
Trend ↑ (↑) ↓ (↓) ↓ (↑)
% Risk
Weight
28 (27) 35 (45) 20 (24)
Allocation 100% (100%)


The Greenback held support at the 1.10 handle and rallied 0.7% on Jan 31 to close at 1.1088. Specs should not be long dollars. Transaction risk on dollar receivables to be covered fully. No Change.

Last week: Main driver of trend is Monthly risk weight which is still in an uptrend albeit a slowing down uptrend. Weekly is down and Daily at a low risk weight level of 10. This could mean dollar strength for a few more weeks but the LT uptrend is still a real and too significant risk of dollar weakness ahead. No change


Cable GBP/USD FX live price, Weekly Sterling vs USDollar Price Risk Analysis Forecast

(Previous week in brackets)

GBP/USD (Cable) LT-M MT-W ST-D
1.3195 (1.3065)
Trend ↑ (↑) ↓ (↓) ↑ (↓)
% Risk
Weight
71 (70) 50 (55) 53 (55)
Allocation 100% (100%)


Sterling still shows similar potential strength vs USD as the other major currencies. In terms of price outlook and once the Dec high is taken out we could be targeting the 1.4000 handle that we saw in the early months of 2018. No Change.

Last week: Cable needs to confirm strength in coming days and maybe weeks in order for us to maintain a strong outlook for Sterling vs USD. No change for now as the LT trend still looks to remains firm


USD/JPY FX live price, Weekly USdollar vs Japanese Yen Price Risk Analysis Forecast

strong>(Previous week in brackets)

USD/JPY LT-M MT-W ST-D
108.30 (109.25)
Trend ↑ (↑) ↓ (↑) ↓ (↓)
% Risk
Weight
43 (45) 65 (79) 17 (75)
Allocation 70% (50%)


Past week’s price action in Dollar Yen starts to look like a runaway market from recent dollar highs. Any rally is likely to be weak. We propose lifting the long dollar exposure risk hedge to 70% on the 109.00 price point or a break of 107.50 whichever comes earlier.

Last week: Dollar was weak during the recent review period but not enough to warrant an increase in cover. We stay at 50% cover on long dollar transaction risk. Very short term we could see a small rally of $/Yen towards the upper 109 handle. No Change


GBP/EUR FX live price, Weekly Sterling vs EURO Price Risk Analysis Forecast

(Previous week in brackets)

GBP/EUR LT-M MT-W ST-D
1.1875 (1.1855)
Trend ↑ (↑) ↓ (↓) ↑ (↑)
% Risk
Weight
84 (83) 57 (58) 74 (82)
Allocation 100% (100%)


GBP continues to develop a weaker picture technically just like we identified in December. GBP long risk exposure should remain covered 100% with further out forward dates. No Change.

Last week: The current uptrend in this cross looks very much like a normal and soon finishing price reverse reaction to the downtrend that started in December at 1.2100. We see GBP eroding over a long periof of time once the LT Monthly trend turns down from the present 80+ risk level. No Change to remain fully hedged against GBP receivables.


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Posted in A - All Financial Blogs | 2020 Forecast, FX - USD Index, EUR, GBP, YEN | EYEFORGOLD.

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