US$ Index

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

(Previous update in brackets)

USD Index Monthly Weekly Daily
90.23 (90.83)
Trend ↓ (↑) ↓ (↓) ↓ (↓)
% Risk
Weight
17 (15) 35 (60) 40 (14)
Allocation 70% (70%)

$Index chart

 


Analysis

7 May 2021: Pressure on the USD started last Wednesday and had strong follow through on Thursday and Friday. As the interim long term Monthly risk weight trend turned back down, this price development suggests a much larger move is looming and we would expect a break of the 2018 low at 88.25 fairly soon whilst no oversold risk weight condition is apparent. For non monopolistic medium and larger international operations the 70% dollar hedge is a responsible position. No Change.

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.


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

(Previous week in brackets)

EUR/USD Monthly Weekly Daily
1.2157 (1.2090)
Trend ↑ (↓) ↑ (↑) ↑ (↑)
% Risk
Weight
77 (79) 65 (42) 55 (87)
Allocation 70% (70%)

EURO/Dollar chart

 


EUR/USD Analysis

07 May 2021: Euro/USDollar of course is the largest contributor to the USD index and 100% confirms the picture sketched above. We expect this pair to break the Febr 2018 high of 1.2550 before long. As we already broke the long term downtrend line back in November 2020, there is technically nothing to stop the Eur/dollar from reaching the 2008 1.6000 high again in a few years time. No Change.

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.


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

(Previous week in brackets)

GBP/USD (Cable) Monthly Weekly Daily
1.3950 (1.3850)
Trend ↓ (↓) ↑ (↓) ↑ (↓)
% Risk
Weight
85 (88) 44 (44) 62 (65)
Allocation 70% (70%)

GBP/USD chart

 


CABLE Analysis

7 May 2021: The Cable picture is broadly showing the same although Monthly risk at a slightly higher nominal risk weight level. Sterlinh has generally remained stronger than we expected for some time although our longer term anaylsis is not changing. GBP/USD however should be on its way to first break the Febr high at 1.4240 with a next stop in a wider 1.60 pivot range. No Change

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.


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

(Previous week in brackets)

GBP/EUR Monthly Weekly Daily
1.1485 (1.1455)
Trend ↑ (↑) ↓ (↓) ↓ (↓)
% Risk
Weight
72 (65) 45 (60) 45 (20)
Allocation 80% (80%)

GBP/EUR chart

 


GBP/EUR Analysis

7 May 2021: Since 2016 GBP/EUR has been trading in a 1.10 - 1.20 range with a brief exit to 1.05 in 2019. Brexit then took the reigns which has favored GBP rightly or wrongly. Speculative pressures have kept GBP in a fairly strong position. Still today GBP is more likely to return to its 50 year long term downtrend against Euro (Read Deutschmark and Guilder). The fact that several equally weak (inflationary) former European currencies are now part of the equation should not hold GBP back from slowly dropping towards and eventually below par in the next few years. No Change.

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 which 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.

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

(Previous week in brackets)

USD/JPY Monthly Weekly Daily
108.43 (107.80)
Trend ↑ (↑) ↓ (↓) ↓ (↑ )
% Risk
Weight
70 (57) 66 (75) 70 (6)
Allocation 70% (70%)

USD/YEN chart

 


Analysis

7 May 2021: Te present technical picture shows weight on the dollar although the long term picture also shows potential weakness for Yen. Once $/Yen approaches 100 again we may need to review the level of cover in favor of Yen. No Change for now.

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.


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

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