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Long Term Forecasts |
Written by DailyFX |
Jul 20 07 17:59 GMT |
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As the EUR/USD once again challenges its all time highs the question facing the FX market in Q3 of 2007 is how high can it go? Euro's strength against the greenback can be summarized in two simple words - relative growth. Eurozone GDP growth in Q1 registered a reading of 3.1% while US GDP for the same period printed at a paltry 0.7%. Furthermore, as 2007 moves forward few analysts project a strong recovery in US demand, while Euro-zone growth continues to surprise to the upside. |
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Long Term Forecasts |
Written by DailyFX |
Jul 20 07 17:58 GMT |
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The second quarter was a phenomenal time to be short the Japanese Yen. Not only did the Yen fall against the US dollar, but it also dropped to decade and in some cases, multi-decade lows against every major currency. From the beginning of April to the end of June, USD/JPY rallied over 600 pips with virtually no retracement. However this impressive move pales in comparison to the 1000 point rally in AUD/JPY, the 1200 point rally in NZD/JPY and the 1400 point rally in GBP/JPY. |
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Long Term Forecasts |
Written by DailyFX |
Jul 20 07 17:57 GMT |
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The British Pound's astounding rise into the third quarter leaves many traders wondering whether the 2.000 level will now become new support for the currency. After reaching fresh 26-year highs of 2.0402 against the Dollar, some analysts see the pair as being top heavy and ready to retrace some of its gains. Interest rates remain the key to further pound strength and with US short term rates having reached their peak, the GBP/USD could hold at lofty levels. Continued spread widening leaves the strong GBP/USD in play, but as heavy resistance sits just above current price, such an outlook clearly depends on the future of short-term interest rates. |
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Long Term Forecasts |
Written by DailyFX |
Jul 20 07 17:56 GMT |
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The Swiss franc has been trading in a relatively tight range against the US dollar throughout the first half of 2007. Yet, over the last four weeks, market conditions seem to have changed and the franc staged an impressive recovery against the US dollar on speculation that the Swiss National Bank (SNB) could accelerate the pace of monetary policy tightening to fight inflation. |
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Long Term Forecasts |
Written by DailyFX |
Jul 20 07 17:55 GMT |
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The Canadian Dollar has shown truly impressive strength in the first half of the year, reaching 30 year highs against its US dollar and outperforming all major currencies on a year-to-date basis. The Loonie made a definitive turn higher in late March on speculation that the Bank of Canada would raise interest rates through the medium term. Indeed, domestic Core CPI jumped well-above the central bank's target of 2.0 percent and has led to the BoC's decision to take rates to 4.50 percent through July. |
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Long Term Forecasts |
Written by DailyFX |
Jul 20 07 17:54 GMT |
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Once again, the Australian dollar was one of the star performers in the currency market. Although it fell short of claiming the title of the biggest gainer (bowing to both the New Zealand and Canadian dollar's stellar rallies), the unit enjoyed considerable appreciation in the second quarter. By the end of the June, the Australian dollar hit an 18 year high against the US dollar and a 10 year high against the Japanese Yen. Even against the stalwart Euro, the Australian dollar rose 3.5 percent. |
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Long Term Forecasts |
Written by DailyFX |
Jul 20 07 17:53 GMT |
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The New Zealand dollar was one of the best performing major currencies in the second quarter. Rising by 10.4 percent against the US dollar, the currency pair climbed to a 25 year high. As a high flying carry trade favorite, the Kiwi was also able to make multi year highs against the Japanese Yen and by the end of the second quarter, NZD/JPY rose to a 19 year high. Having raised interest rates three times this year, with two of those happening in Q2, New Zealand not only has one of the highest interest rates in the industrialized world, but also a growing one. |
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Long Term Forecasts |
Written by Karoll Financial House |
Jul 14 07 14:35 GMT |
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The chart presents my long term wave count. It suggests that there was a multi months bullish triangle and the current rise is the movement after its end. It begin at 1.8514 (October 2006) and is developing as a potential terminal impulse (ending diagonal). Such a pattern appears always in the end of a movement so if my suggestion comes true, a reversal of the up-trend started from 2001 year is forthcoming. |
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Long Term Forecasts |
Written by Danske Bank |
Jun 29 07 08:25 GMT |
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The essence of this outlook is that Fed will eventually have to take US monetary policy to a tighter level. We believe that the Fed will begin to prepare the grounds for such a move during H2, as more unambiguous signs of stabilisation in the housing market materialise and core inflation fails to moderate further. Consequently, we mark up our 12-month fed funds forecast to 5.50%, while emphasising the risk of even further tightening. |
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Long Term Forecasts |
Written by Jyske Bank |
Jun 26 07 10:03 GMT |
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The financial markets have been turbulent over the past weeks. Market rates have increased significantly, equity prices have been under pressure and the dollar has strengthened. This development should be seen on the background that the financial markets have reassessed their view on the economic development in the US. Following a string of good indicators, growth is now assessed to be higher than previously expected. There are therefore no longer expectations that the Fed will cut interest rates this year. |
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Long Term Forecasts |
Written by Karoll Financial House |
Jun 10 07 14:47 GMT |
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For a long time the situation in USD/JPY was unclear from the long term point of view. In fact the uncertainty remains but there are signals that my favorite pattern (terminal impulse) is developing, which could give me a possibility to enter a position with a relatively close stop loss and very huge profit potential. |
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Long Term Forecasts |
Written by Karoll Financial House |
Jun 03 07 09:12 GMT |
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In the previous analysis I pointed 1.3664 as a key resistance. The reached high from the recent rise was 1.3681 and a retreat of around 300 pips followed thereafter. From this point of view one can state that the previous analysis suggesting a long term reversal and beginning of a multi years fall with potential target parity was correct. Also as I wrote in the previous analysis the long term reversal idea is valid from a theoretical point of view as long as the euro stays below 1.3825. |
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Long Term Forecasts |
Written by Global Forex Trading |
May 18 07 05:43 GMT |
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I have been mentioning my the daily report the proximity of strategic highs in USDJPY and EURJPY which should trigger quite substantial declines. The two appear to be approaching these key highs simultaneously in both time and price and it is best to be aware of the implications of each. |
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Long Term Forecasts |
Written by Global Forex Trading |
Apr 16 07 06:52 GMT |
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The Euro has seen a long rally from the 1.1640 low in November of 2005 - that's almost 18 months of pretty consistent gains and the long term there still appears to be further to go. However, there are signs of exhaustion raising the chance of a significant correction before it can break cleanly above 1.3666. |
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Long Term Forecasts |
Written by Karoll Financial House |
Apr 14 07 18:21 GMT |
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My working count suggests that a triple corrective combination is developing from 0.8563 (February 2002). Currently we are in the end of its third phase presented on the chart. I think it is developing as a flat correction with and the last up-move is wave (C) of it. My count suggests that this wave (C) is a terminal impulse (ending diagonal) which should finish around current levels. |
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Long Term Forecasts |
Written by DailyFX |
Apr 11 07 15:35 GMT |
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As the currency market enters the second quarter of 2007, the main driver of the price action in the EUR/USD will be determined by the depth any housing market downturn in the US. If the problems in the sector are contained only to sub prime mortgages, then the Federal Reserve may keep interest rates unchanged at 5.25 percent, which will spur continued demand for dollars. |
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Long Term Forecasts |
Written by DailyFX |
Apr 11 07 15:32 GMT |
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With the BOJ sidelined by the upcoming Japanese parliamentary elections this summer, yen longs will see no help from the monetary authorities as rates are expected to remain at 50bp for the foreseeable future. Japan's ultra low short term rates - the lowest in the G-7 universe - will continue to weigh on the currency making it vulnerable to the carry trade. |
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Long Term Forecasts |
Written by DailyFX |
Apr 11 07 15:29 GMT |
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The countervailing forces of rising inflation and moderating economic growth leave risks for both steady or higher rates.. April will prove an especially critical month for short term yields, with key MPC Policy Meeting Minutes due on the 18th and Gross Domestic Product figures available on the 25th. Market expectations will hinge on the former, while the Bank of England's stance on monetary policy will clearly depend on economic expansion data. |
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Long Term Forecasts |
Written by DailyFX |
Apr 11 07 15:24 GMT |
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Ultimately, Swiss enthusiasts will likely be in for a long three months in the second quarter, as fundamentals factors continue to battle countering capital flows in establishing a directional bias. So long as consumers and exports continue to support economic growth in the near term, potential bursts in inflation will remain on the minds of hawkish central bankers. |
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