It’s that time of year again. When traders tally up their
progress so far, and like it or not it’s almost time to close the books on
another year. Barring the proverbial ‘Hail Mary’ trade that can undo a year’s
worth of portfolio damage, it’s time to ride the setting sun on 2014.
The Dollar has done well for the longs so far, which in the
current global macroeconomic environment led me to question whether the
strength has been home-grown or a default outcome of weakness everywhere else
in a previous blog. The Federal Reserve
has led the conversation among central bankers around the globe as it balances
its dual mandate in an environment that is not leaving it with too many clear
directions to take monetary policy into. In times of this level of uncertainty,
the one safe bet has been (and will continue to be for some time) the US
dollar.
In the intermediate however, there are some technical
aspects of financial markets, the currency market included that are
over-exerted at current levels. The trends I’m referring to, to be certain will
resume as there are fundamental underpinnings that drive them, but as the old
adage goes, “nothing goes up or down in a straight line”.
As I’m writing this and referring back to my trading
platform the Dollar Index (/DX) is at around 85.6, but my target for year’s end
is around the 83.0 level; not very far for the index itself but significant all
the same from its components and other major US trading partners.
Starting in Asia, from its current level of 0.88, I have a
target of 0.92 for the Australian Dollar. From its current level of 108.0, I
have a target of 103.5 for the Japanese Yen. Moving into Europe, from its
current level of 1.27, I have a target of 1.32 for the Euro. From its current
level of 0.95, I have a target of 0.92 for the Swiss Franc. From its current
level of 1.61, I have a target of 1.65 for the Pound Sterling. And finally to
the Americas, from its current level of 1.21, I have a target of 1.08 for the
Canadian Dollar.
Good luck.
Thanks to all,
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