The US Dollar Against Other Major Currencies (October–November 2014)

■ Market/Asset: Forex / The US Dollar against other major currencies

■ TCI Forecast: USD correction is ending, followed by a new USD uptrend (↑)

■ Momentum: The new uptrend is expected to begin in the last days of October 2014 and peak by late November 2014

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Foreign Exchange Market Outlook

The strength of the US Dollar over the next 6 to 12 months is clear, but Forex currencies don’t move like stocks, so this strength won’t follow a single straight trend. In September 2014, the US Dollar rose rapidly against other major currencies, as shown in the TCI tables below. This fast move created an overbought US Dollar market (EURUSD, USDJPY, GBPUSD), making a correction inevitable. Neither the Fed nor the ECB wants the USD to move too sharply, as this could hurt the real economies in both regions.

The US Dollar’s rise will happen at the right time and with proper market momentum. We expect USD bullish runs of 4–6%, followed by corrections of 2–3%, with cycles lasting 3 to 4 months overall.

Evaluating the Previous Forex Trading Signal on USDJPY (September 2014)

In our previous Forex trading signal, we predicted a correction for USDJPY. At that time, USDJPY was trading at 108.626. We also identified 110.75 as the first strong resistance level. On October 1st, USDJPY reached 110.08 and then began to correct. By October 15th, USDJPY hit a local low of 105.193. The signal was confirmed.

🔗 The Previous Forex Signal: » Forex Trade Signals -USDJPY September 2014

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TCI on USD against Other Majors

The Trading Center Indicator (TCI) is a comprehensive technical analysis tool developed by TradingCenter. What makes TCI unique is its ability to forecast both upcoming trends and timing patterns. » Trading Center Indicator (TCI)

Here are the TCI indications for the US Dollar against the EUR, GBP, and JPY:

Table: TCI on EURUSD

Table: TCI on GBPUSD

Table: TCI on USDJPY

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USD Statistics against the Euro, British Pound, and Japanese Yen

Below are the US Dollar statistics for the coming months, based on 13.5 years of research by TradingCenter.

Table: EURUSD Statistics

MONTH	AVERAGE CHANGE	TIMES(↑↓)	AVERAGE VOLATILITY
OCTOBER	-0.50%	7↑ 6↓	0.904%
NOVEMBER	0.49%	7↑ 6↓	0.909%
DECEMBER	1.95%	8↑ 5↓	0.817%

As shown in the table above, the Euro usually ends the year strongly. So, if you are shorting the Euro against the USD, keep your positions no longer than early December 2014. ► More Statistics Here

Table: GBPUSD Statistics

MONTH	AVERAGE CHANGE	TIMES(↑↓)	AVERAGE VOLATILITY
OCTOBER	0.08%	8↑ 5↓	0.831%
NOVEMBER	-0.61%	4↑ 9↓	0.839%
DECEMBER	0.37%	5↑ 8↓	0.783%

Table: USDJPY Statistics

MONTH	AVERAGE CHANGE	TIMES (↑↓)	AVERAGE VOLATILITY
OCTOBER	-0.94%	5↑ 8↓	0.862%
NOVEMBER	-0.23%	6↑ 7↓	0.836%
DECEMBER	0.89%	7↑ 6↓	0.778%

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Recent Important News and Updates Related to USD and Other Majors

• There are rumors that the ECB bought corporate bonds

• Paul Robson, RBS currency strategist, said recently: “The general takeaway here for a lot of people is that it shows commitment from the ECB trying to find ways to expand its balance sheet.” He added, “People still recognize that the US economy is several years ahead of the ECB, which on a multi-quarter basis suggests EURUSD will go lower.”

• David Tepper, who manages Appaloosa Management’s $20 billion debt hedge fund, said that shorting the euro is the ‘best idea.’ He believes the ECB will need to loosen Eurozone monetary policy further by expanding its balance sheet to stimulate the economy.

• The FED meets next week and is expected to expand its $4 trillion bond-buying program.

• Regarding upcoming US inflation data, the annual CPI is expected to be 1.6% in September 2014, down slightly from 1.7% in August 2014.

• The Core US CPI in September is expected to grow 0.2% month-to-month and 1.7% year-to-year.

• Koichi Takamatsu, head of Forex Trading at Nomura Securities, said: “The US CPI data will be very important. If the market turns risk-off, money will flow into US bonds. A weak figure will surely hurt the dollar.”

• Russian Finance Minister Anton Siluanov stated that the ministry will hold its first Forex deposit auction starting in early November 2014 to address USD and Euro shortages among Russian banks.

• Since early October, the Central Bank of Russia has spent more than $13 billion supporting the local currency (Ruble).

 

■ Free Forex Trading Signals: US Dollar October-November 2014

George Protonotarios, Financial Analyst

TradingCenter 22nd of October 2014