Tech Musings - Currencies

In my previous two post on currencies written on 30th January 2015  I wrote the following, “DXY recently made a high of 95.5 and had almost hit the target level. If we see the long term chart of DXY we can see that it is trading at 36 years resistance line hence I expect some correction and pull back in DXY. Alternatively if DXY can break the resistance and move towards 100 levels then the target for DXY will be around 120.”

As expected DXY topped out at 100 and move sideways. Since then DXY had consolidated between 92 – 100 levels. 

In the update given on 8^th January 2016, “I expect the down trend in these currencies will continue and they will gradually depreciate against USD. Once DXY moves above 100 levels we can see sharp depreciation of these currencies against USD.” Finally in November 2016 after a long consolidation of 23 months DXY has recently broke above 100 levels.

If we look at the given chart of DXY it seems that DXY is ready to move up to 120 levels. If DXY closes above 100 levels by the end of December the target will be 120. 

 Euro has strong support at 1 – 1.05 levels. I expect that eventually Euro will break below them and target for Euro stays at 0.80

JPY is forming a large inverse head an shoulder patter and this years strengthening of JPY from high of 130+ to low of 100 was just the completion of the right shoulder. I expect JPY to break above 130 and move towards 150 – 160 levels

Similar to JPY SEK is also forming a large inverse head and shoulder and is nearing a breakout from the pattern.  The target for SEK is at 10 and 11.25

Summary:-

1.      I am expecting in next two to three years DXY will appreciate to 120, EURO will fall to 0.80, JPY will be trading at 150 – 160 levels.

2.      Similarly other currencies like CHF, CAD, AUD will also weaken significantly v/s USD in next two years.