covering USD Index, EUR/USD, GBP/USD, GBP/EUR, USD/JPY
(Previous update in brackets)
|Trend||↓ (↓)||↑ (↑)||↑ (↑)|
|15 (13)||43 (16)||76 (60)|
25 June 2021 close: Nearer to June month end, the Greenback is still firmly on its long term downward path. The 1.5% correction up we witnessed the last few weeks is expected to end soon. The Long term oscillation is definitely down for the dollar as long term risk weight showed clear double bearish divergence at 1.0400 in Decemeber 2016 and again more extreme bearish divergence in March 2020. The Dollar now trades closer to the upper resistance of a 6 months 2% range consolidation. The same outlook applies to the broader range of major currencies versus USDollar with Euro expected to reach 1.2550 and beyond. Sterling still shows a weaker technical picture but seems to be favored by investors for some reason that is beyond our grasp. The UK economy is not on strong footing and seems to be less advantaged from its new independence from Europe after returning to its traditional and very conservative Rule Britannia objectives. It is just a matter of time for the UK to resolve its budget contstraints by massive inflation leading to a lower currency value as it did during most the Postwar period leading up to introduction of the Euro.
Time will tell of course. No Change to our broaderrisk weight driven 70% perpetual dollar receivables hedge and Sterling receivables against Euro.
11 June 2021 close: For two months the US dollar has remained fairly quiet and in a narrow range 2% range. Silence before a storm?
The broad analysis, which applies to all major USD pairs, is that no major trend bottom has materialized to date short term bottoming action as we see in today's chart comes and goes, but we should start to see a deeper bottom risk weight level followed by bullish divergence in weekly and monthly time scales. This is what can be expected and what we should wait for. The USD therefor remains a higher risk currency at this moment and diversification and hedge operations should take this risk into consideration. There was a Biden effect, it seems, on Thursday and Friday as the dollar gained ground against most majors and this short term correction may continue for a little while longer. No Change to the general outlook which is for a substantially weaker dollar.