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U.S. DOLLAR INDEX

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U.S. dollar strength is here to stay. Greenback had a strong recovery last week. Strong dollar will continue to put pressure on commodities, commodity currencies and also emerging markets. In other words, weak emerging markets, commodities and strong U.S. Dollar trend is likely to continue in the following months.

After its breakout from a decade-long consolidation in the last quarter of 2014, U.S. Dollar index rallied from 85 to 100 levels. Since March 2015, price has been pulling back to the strong support at 92 levels. Last week, the dollar index tested the strong support and rebounded sharply. Latest consolidation is more like a counter trend move in the context of a short/medium-term correction. Uptrend in the U.S. Dollar remains intact and once the choppy sideways consolidation is over we can expect the continuation of the uptrend.

US DOLLAR INDEX

MAJOR U.S. DOLLAR CROSS RATES

EURUSD

USDSGD

U.S DOLLAR VS. SINGAPORE DOLLAR

USDSEK

U.S. DOLLAR VS. SWEDISH KRONA

USDNOK

U.S. DOLLAR VS. NORWEGIAN KRONE

USDCAD

U.S. DOLLAR VS. CANADIAN DOLLAR

USDJPY

U.S. DOLLAR VS. JAPANESE YEN

GBPUSD

BRITISH POUND VS. U.S. DOLLAR

NZDUSD

NEW ZEALAND DOLLAR VS. U.S. DOLLAR

AUDUSD

AUSTRALIAN DOLLAR VS. U.S. DOLLAR

JPY/SGD

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Long-term opportunities don’t often come along. So when they do it’s worth paying attention to these developments. In the beginning of 2014, AUD/NZD cross-rate was finding support at a multi-decade horizontal trend line. Base formation took more than 5 months to develop. I sent out two updates one in (April 30,2014) and one in (June 4, 2014) drawing attention to a major low. Similar technical chart development is now presenting itself on the JPY/SGD. Cross-rate is reaching a multi-decade support area between 1.15-1.17. This could be a major low for the JPY/SGD. Though, it is important to note that base formation could take several months.

JPYSGD

AUDNZD

GBP/SGD

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Long-term trends can be interrupted by short/medium-term consolidations; in other words “breath-taking” periods. In technical analysis these type of short/medium-term consolidations are classified as flag, pennant, triangle or rectangle chart pattern. Each chart pattern has its own characteristics.

Since the beginning of 2013, British pound has been outperforming Singapore dollar. Cross rate formed a clear uptrend. After reaching 2.13 levels in the beginning of 2014, GBP/SGD started moving sideways to form a common consolidation pattern known as symmetrical triangle. Volatility on daily and weekly scale suggests another trend period is likely to unfold following the latest consolidation. Breakout above 2.12 levels will be bullish for British pound and GBP/SGD cross-rate will target 2.15-2.18 area. As long as the cross rate remains above 2.09 levels the uptrend will remain intact.

GBPSGD