EUR/USD

Dollar strength is testing both medium- and short-term target levels.

The probability of further meaningful gains from a technical analysis perspective is low, with extended market conditions at important levels.

While the view is for a bearish reversal and meaningful downside, this view will only be confirmed on breaching of stated pivots.

“Technical analysis is a probability study on future market action”

The current US Dollar bull trend is approaching respective medium-term targets against most currencies.

There is a likelihood of a trend reversal, or at the very least a meaningful correction of current Dollar strength.

US Dollar strength has exceeded our expectations and necessitated some adjustments to the medium- term outlook.

It seems that recent fundamental events have had a marked influence on the value of the Greenback.

Market behaviour and trends do not always abide by our expectations and analyses.

Besides being a lesson in humility, it also emphasizes the importance of pivotal technical levels as a disciplined investment approach.

The longer- term bearish outlook on the US currency remains valid.

Further medium – term range trading is preceding the eventual bear trend.

We “ await” US presidential election and then “await” the FOMC meeting.

Then we will “digest” the results before “awaiting” the next important economic figures….

Our longer- term bearish stance on the Greenback remains valid and is ongoing.

Recent gains have, however indicated that the 18-month-old consolidation phase remains in force, effectively postponing the larger bearish potential.

The long-term monthly analysis confirms the respective weekly views.

The US presidential election and upcoming FOMC meeting could result in volatility, but this report does not take any fundamental drivers in consideration as a purely technical outlook.

Users can overlay and include their own perceptions and analyses.

While the longer- term bearish outlook on the US currency remains valid, medium- and short-term outcomes were adjusted since last week’s report.

The alternative outcome of consolidating market action was validated by extended short term appreciation beyond pivotal levels.

Further medium – term range trading has postponed the still relevant and eventual bear trend to new lows.

The US Dollar Report for the 16th of October 2024.

Our medium to longer term bearish stance on the Greenback is ongoing.

Further weakening is expected to reach our long-held target levels.

This is unlikely to be the move that perma- bears expect to “ dethrone the US Dollar” . It is more likely a bearish correction in a cyclical bull trend.

The general outlook of Rand strength within larger consolidation patterns has materialized during September.

In the case of the USD/ZAR pair an extended bear phase had to be considered after the breach of initial targets, that is approaching the extended target area. The USD/ZAR move can largely be ascribed to recent USD weakness against most currencies.

The USD/ZAR and EUR/USD pairs have become extremely oversold and while there is short term room for further modest downside, the risk of bullish corrections is increasing.

The general US Dollar bearish trend remains intact and the most probable medium term technical outcome.