The US Dollar Extremely Strong within G3 (USD, JPY, EUR)

Intermediate

The US dollar was already exhibiting a bullish technical analysis tone versus both the Euro and Japanese yen (the G3 currency complex) in early November. But a surge by the Dollar since the US Presidential election result across the major currencies has been particularly impressive within G3. This leaves the Forex market analysis for a significantly still stronger US currency into the end of 2016.

The EURUSD plunge below 1.0848 has reinforced a larger and more bearish topping structure and leaves the EUR USD forecast for November and December closer to parity (1.0000).

Our USDJPY forecast is also for significant US Dollar gains, with the break above 107.49 completing a multi-month basing pattern and leading risks significantly higher for USDJPY into the second half of Q4 2016.

USDJPY

A surge still higher Friday above the psychological/option level at 110.00, plus 110.40 and 110.85 targets, to build on the Wednesday push through the 38.2% Fibonacci retracement of the entire 2015-2016 sell-off at 109.26.

This price action reinforces the Quadruple Bottom structure, the intermediate-term bullish trend.

Short/ Intermediate-term Outlook – Upside Risks:

  • We see a positive tone with the bullish threat to 111.45 and 111.89.
  • Above here targets 112.42, 113.80 and 114.88.

What Changes This? Below 105.99 signals a neutral tone, only shifting negative below 104.93.

Daily USDJPY Chart

USDJPY

EURUSD

‘A Friday push below minor support at 1.0600 and 1.0580, to reinforce the mid-November break through key 1.0777 and 1.0708 supports.

Furthermore, the aggressive sell-off back through 1.0987, after the Wednesday US Presidential election result, signalled an intermediate-term shift back to a 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.

Daily EURUSD Chart

EURUSD

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

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