Thursday, 17 December 2015
The US Dollar is over-priced, but interest rate disparity continues to press the Euro downwards.
There should be a EUKR/USD spring-back after yesterday's down-spike, but since the over-all motion is back towards my projected long-term Support Line (the green dotted line), this spring-back will be weak.
Whether it follows the gradual fall of the curved line or plunges down, I still project the dotted green line as the best guess of the slope of the Euro's emerging uptrend.
Wednesday, 16 December 2015
Yesterday's upswing has aborted this morning (16 Dec 2015) in antiipation of Yellen's announcement later today of an American interest hike. Expect a down-spike today.
Tuesday, 15 December 2015
Blue Support Line S, referred to in my last post, has not held. The dotted green line is a guess as to the slope of the anticipated uptrend. The actual support level could be established at a greater or lesser slope. Reaching the green line is more likely to be gradual than sudden, and hemmed between the curves.
Sunday, 13 December 2015
Wednesday, 9 December 2015
A nice bonus to those of us who took a long bet on the Euro is its new spike today, so long as we exit in time, of course.
Every spike has an apex followed by a down-slope. As to where exactly the apex is, your guess is as good as mine. Previous examples indicate the downturn will be sudden and sharp.
DOW INDUSTRIALS began to trend downwards in Apr 2014, as expectation of an increase in FED interest rates began to take hold. The market rallied in Aug, with good performance figures and postponement of rate increases to year end. Year-end is nigh and the down-trend resumes. I have drawn a curve to indicate the probable Resistance level in the coming months, and predicting a level of 16,000 by mid Jul 2016.
Tuesday, 8 December 2015
The Euro flattened out this morning, indicating it will not fall any further from last Thursday's spike. I show the possible slope of the coming uptrend by a green dotted (Support) line, and an indication of how the price may move by a green curved arrow.
Monday, 7 December 2015
Having spiked on Thursday last, with news that the ECB will be less aggressive than expected in its Quantitative Easing program, the Euro now comes down from the spike. If an uptrend is emerging, as I epect, then it will meet support at or before the green line and, I guess, will not fall as far as the brown line, which I drew in a previous post to show the bottom that the graph was forming.
Thursday, 3 December 2015
The jump in value of EUR/USD today is, surely, a spike. There is a definite break-out from the recent downtrend and this spike marks the beginning of the new uptrend. However, the slope of the uptrend is more likely to be that marked by the green trend-line I have drawn.
Wednesday, 2 December 2015
EIRL is an Exchange Traded Fund tracking the top 99% of Irish shares. The Irish economy grew by around 6% in 2015. Its projected growth for 2014 is around 4%. This is based on an expectation that growth will slow as the economy approaches its capacity. At the end of 2015, however, it is apparent that many Irish workers who emigrated during the recent recession are returning home, boosting that capacity. As the Irish construction industry takes off again, tax figures prove surprisingly buoyant, Europe and America continue to improve, and both the Euro and Energy prices stay relatively low, 4% is looking very conservative.
The chart shows EIRL compared to Dow Industrials. A dip late in 2014, following excessive exuberance in 2013, means that Ireland is good value now, and should beat the Dow in the coming months..
Tuesday, 1 December 2015
The above chart shows that the USA economy performed marginally better than the Euro Zone during the first three quarters of 2015 (2.1% GDP growth as against 1.6%)
However, the Euro fell a total of 25% against the US dollar between Apr 2014 and Dec 2015.
Euro Zone policy favours continuation of low interest rates and Quantitative Easing, while USA contemplates raising interest rates and paying off QE debt in 2016. These differences in policy do not justify the continuance of the low value of the Euro.
I believe the EUR/USD is at or around the bottom of its down-slide and will commence an upward trend soon.
I show my prediction for the Euro in the following chart: EUR/USD to reach $1.2 by next July and $1.25 by end of 2016.
Monday, 30 November 2015
The curve I drew in my last Euro post holds. The Euro decline appears to be bottoming out. On Wed 3 Dec 15 both the Fed and the ECB will show their hands. Fed may emphasise the gradual nature of coming rate increases and ECB may lighten up on its Quantitative Easing program. Many punters, however, still expect parity before year end, pressing EUR/USD down. Perhaps 1.00 is the real bottom, after a short recovery this week. I wait and watch.
Thursday, 26 November 2015
Having risen for 6 months from Mar, the Euro took a drop in October (when I went on holiday and) on news that US interest rates are to rise before year end, while Europe would continue its low rate policy. News that Great Britain is contemplating Euricide probably had no effect, since Sterling continues strong, Brexit is a long way off, and would be slow and negotiated in great detail.
I would guess that the October down-trend is now bottoming out, but the re-emergence of its uptrend will be slow.
Thursday, 15 October 2015
Wednesday, 7 October 2015
Tuesday, 29 September 2015
Most commentators continue to expect the Euro to decline against the US Dollar -and still predict parity before year end. I, however, believe what I see.
I see my country, Ireland's, exports booming and tourists pouring in, partly because the low Euro makes our prices appear very low to those with Sterling or Dollars. In other words, Euro is undervalued and must rise, no matter how Ireland and, more importantly, the ECB, would want to keep it down.
The chart shows that an upward trend began around 13 Mar 2015. Still at a low slope, an acceleration of the uptrend is indicated. Last week's ECB meeting caused a dip, but the ECB can't, in fact, prevent the inevitable. A rise in American interest rates could bolster the Dollar - but is that not on the long finger?
Thursday, 24 September 2015
Having hit the target set in my last post, NASDAQ rebounded today. However, I would say that it could repeat the pattern of the dotcom correction of 2000, (blue triangles). Upswings will occur, but the trend could continue downwards throughout 2016 and into 2017, until the long-term Support Line is reached.
Wednesday, 23 September 2015
Tuesday, 22 September 2015
The upswing of the Dow after the Great Fall of China has ended (for now) and the downtrend is becoming more defined. Resistance Line A recedes into history. Resistance Line C looks solid, but there could still be a moderation of the downtrend via an upswing bringing us back to Resistance Line B.
Friday, 11 September 2015
Thursday, 3 September 2015
The monthly ECB meeting today, showing European growth practically non-existent, inflation flat and money-supply increasing, threw a bucket of cold water on the Euro. Result: EUR/USD plunges, and I exit my position with egg on face. Will it continue to plunge or level out? Who knows?
Tuesday, 1 September 2015
Thursday, 27 August 2015
My prediction of yesterday was incorrect. NASDAQ (and DOW) rose to break through the blue Downtrend Resistance Line. The new Channel that emerges faces upwards.
Early morning sees European markets opening higher, but Bull-Bear tug-of-war very active. Who dominates will be a clue as to whether NASDAQ is at a peak. I would not bet on it rising higher, but expect a downswing.
Tuesday, 25 August 2015
Line A is the long-term Support Line that has held since 2013.
Line B indicates an emerging down-trend (in anticipation of coming interest-rate hikes, I suppose).
The bounce-back from the Chinese Fall has crashed through this emerging Resistance Line, but I expect the down-trend to re-assert itself, with probability that this Resistance Line will be re-instated.
After its bounce back from the Chinese Fall, the Dow continues its downtrend and tries to define a Channel in which to move.
Monday, 24 August 2015
Every currency wants to devalue, so the ECB's long lead in the devalue stakes has come to a halt. When the Euro1.78% comes down from its current peak, it will rise to its next peak somewhere around the same. The trend continues upwards
Friday, 21 August 2015
Support Line A was breached on 25 May, indicating the beginning of a downtrend. Support Line B of the downtrend is now severely breached. Unless we are to see a market crash (for which there is really no reason), today's plunge should be compensated by a upwards surge. That is in the nature of spikes.
Thursday, 20 August 2015
The present pattern suggests an upswing from here possibly as far as 173.50 (DIA price), followed by a downswing to c. 171, as the DOW continues is downtrend fuelled by prospect of Interest rise in the New Year. Final tentative target of the Downtrend is represented by the Green Line, in Jan or Feb 2016, at around 155.
If the DOW is in a downtrend, why not the NASDAQ? I see the NASDAQ 100 swinging up for a bit (possibly to 4500), before continuing its nascent downtrend. Not as definite a downtrend as the DOW, but are not all the American markets to react the same to the prospect of interest rates rising?
Wednesday, 19 August 2015
Today, Wed 19 Aug, the US Central Bank will give a hint as to whether interest rates will rise in Sep. Most likely they will not - saving the markets from a severe plunge. Postponing the rise in interest rates will give the markets a breather. The curves on the chart show scope for the downtrend to slow down for a while.
Monday, 17 August 2015
The long term chart shows the EUR/USD at the bottom of its natural zone, and rising from this bottom.
Downward pressures are the prospect of a rise in American interest rates and commencement of Quantitative Tightening in the US, as against continuing ZIRP and QE in Europe.
A week ago it seemed that these pressures had stopped the resurgence, but China stepped in to force the Euro to rise against the Yuan, which necessarily means rising against the Dollar. The balance has, perhaps, shifted back in favour of a rising EUR/USD.
Wednesday, 12 August 2015
Tuesday, 11 August 2015
Saturday, 8 August 2015
Monetary outflows from Europe continue according to Deutsche Bank.
US interest rates are to rise later this year.
QE, if the funds are not re-invested, will convert into Quantitative Tightening.
The US Dollar will strengthen again against all comers except, perhaps, GBP and NZD.
While the trend of the Euro against the Dollar has been slowly upwards since early Mar, this rally has proven rather weak-hearted and is running out of whatever steam it had. The year-long downtrend that began in May 2014 appears to be re-asserting itself. This week EUR/USD must break through either the Year-long Resistance Line, or the 3-month old Support Line. I guess that it is the Support Line that will not hold.
Friday, 24 July 2015
Wednesday, 22 July 2015
The Euro is at the bottom of its normal range. It seems to be undervalued relative to the US Dollar and should rise from here.
However, the expectation that US interest rates are to increase while ZIRP and QE continue to apply in the Eurozone puts pressure on the Euro to sink rather than rise.
The fact that US interest rate rise is not now expected until December probably indicates that the trend of EUR/USD will be hesitantly upwards for the moment.
Friday, 17 July 2015
Wednesday, 15 July 2015
Monday, 13 July 2015
Quite a surge in share prices this weekend (Thursday 9 Jul to today, Monday 13), giving mixed signals.
My guess is that the present upswing ends right where it is at now. This peak is unlikely to exceed the last peak on 18 Jun, but meet resistance at either the curved lines or straight Resistance Line R1.
Click image to enlarge.
Swinging down at the moment, the breaking news from Brussels of an Agreement between EU leaders on Greece, will see this downswing aborted and the Euro zoom upwards.
The purple triangle on the chart tentatively shows the shape of the emerging upwards channel.
The 30-day MA (720 hour) begins to turn upwards.
The US Dollar is certainly too expensive as far as trade is concerned, and the ultimate target of the upswing will be c. $1.50, by September, perhaps.
Friday, 10 July 2015
Wednesday, 8 July 2015
As Greece works towards an accommodation with Europe, the effect of the crisis on EUR/USD is lessening. The bottom is taking on a parabola shape, as is the top.
Will the EUR/USD stabilise at a value within the flattened bottom of the parabola, or will it start to rise? This depends on the market's belief in an American interest rate rise.
Recent FED statements tend to indicate postponement and minimisation. If this is what is believed, we should see a rise in the Euro when the present instance of the Greek affair is resolved - until an interest rate hike is seen to be imminent again.