US$ Index

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

(Previous update in brackets)

USD Index Monthly Weekly Daily
90.83 (92.08)
Trend ↑ (↑) ↓ (↓) ↓ (↓)
% Risk
Weight
15 (22) 60 (77) 14 (22)
Allocation 70% (70%)

$Index chart

 


Analysis

23 April 2021: Currency analysis is mostly for longer term hedging of transaction and translation risk, hence a bi-weekly update unless something special is happening in the currency market. Dollar weakness is our expected trend and we see no immediate end even though the dollar has traveled a mere 10% from the most recent long term peak. No Change.

12 April 2021: USdollar is clearly trying to find direction but the uptrend was halted dropping over 1.5% from the peak last week. No Change to overweight hedge on dollar receivables.


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

(Previous week in brackets)

EUR/USD Monthly Weekly Daily
1.2090 (1.1910)
Trend ↓ (↓) ↑ (↑) ↑ (↑)
% Risk
Weight
79 (76) 42 (20) 87 (80)
Allocation 70% (70%)

EURO/Dollar chart

 


EUR/USD Analysis

23 April 2021: A correction never came. Just a short 4 days consolidation around 1.1975 and then pushing over the 1.20 handle last week. Hourly chart is overbought but the Daily and Weekly time scales are trending up. Long term risk is higher but no evidence for an imminent trend change. We stay with a 70% perpetual hedge on longer dollar transaction exposures.

12 April 2021: Euro strength has lifted Daily risk weight rapidly from 20 to 80% and is creating space for a brief divergence correction. Euro/US$ is also seeking direction and hefty investment trading has short term impact on the exchange rate too. In the old days, the 70's, the bank would call the Central bank with orders of 100M or more. These days it is billions which can be absorbed by most major banks' treasuries. These numbers often have no reference whatsoever to any type of international trade. There is no clear long term direction because the US$ failed to push harder on the downside in recent months. For now no change but we may have to review the hedge weight in the near future. Biggest reason to stay with dollar weakness is bullish divergence between Weekly (low risk up) Euro/USD and Monthly (high risk down). The latter doesn't appear finished as we would expect it to spike before reaching a more serious cycle top.


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

(Previous week in brackets)

GBP/USD (Cable) Monthly Weekly Daily
1.3850 (1.3740)
Trend ↓ (↓) ↓ (↓) ↓ (↓)
% Risk
Weight
88 (85) 44 (42) 65 (23)
Allocation 70% (70%)

GBP/USD chart

 


CABLE Analysis

23 April 2021: Even though Cable still looks a bit weaker than other currencies versus USD, we'd stay with the 70% dollar risk hedge. Current technical chart signals appear to keep a check on a rapidly rising sterling price. No Change.

12 April 2021: Cable looks a bit stronger following a larger drop pushing GBP a bit further down against all other majors. Divergence between short medium and long risk should keep GBP/USD from pushing down further. No Change.


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

(Previous week in brackets)

GBP/EUR Monthly Weekly Daily
1.1455 (1.1535)
Trend ↑ (↑) ↓ (↓) ↓ (↓)
% Risk
Weight
65 (70) 60 (76) 20 (8)
Allocation 80% (80%)

GBP/EUR chart

 


GBP/EUR Analysis

23 April 2021: Monthly time scale which has been in an uptrend has now slowed down with risk weight slightly slower. Looking at a longer term chart we can clearly see this 5 year consolidation from wich we expect GBP to eventually drop below par against the Euro. GBP is a high risk currency again just as it was during the 1980's. No Change.

12 April 2021: GBP/EUR has been stronger than we expected and last week took a relative beating. The fundamentals for GBP don't look good as the economy suffers tremendously. The currency however doesn't seem to care much until last week. We should expect a corection in the opposite direction again, but we generally remain with our long term forecast of a sub par GBP vs Euro. No Change.

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

(Previous week in brackets)

USD/JPY Monthly Weekly Daily
107.80 (109.40
Trend ↑ (↑) ↓ (↓) ↑ (↓ )
% Risk
Weight
57 (60) 75 (87) 6 (42)
Allocation 70% (70%)

USD/YEN chart

 


Analysis

23 April 2021: Dollar Yen is matching the general picture of dollar weakness. Behavior is a little less sharp technically as around the most recent trend turn at the 110.00 handle, where we increased our dollar hedge recommendation to 70%, there is no clear bearish divergence. Daily risk is oversold and we may expect a bit of a bounce next week. This bounce may have already seen its actual peak on Friday morning at 108.15. Weekly time scale looks to continue down. No Change.

12 April 2021: Last week we increased dollar receivable hedge to 70% perpetual.
That technically also seems the lower risk type of approach with USD > 110.00. Some bulliswh divergence is possibly developing between Daily and Weekly risk weight but isn't that clear as Daily is in a downtrend in the 40-45% risk range. No Change.


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Posted in A - All Financial Blogs | 2021 Forecast, FX - USD Index, EUR, GBP, YEN | EYEFORGOLD.

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