Chart Attack: Forex 2016

Here are some longer time frame look at each currency titans that could shape 2016. This is by no means a view or material that is produce for investment purposes. No indication is made to suggest what may happen but there are some points that are raised by the author.

Thoughts into 2016:

  • Ending the era of cheap money in 2016?
  • Share buy back remains the case for 2016?
  • 2016 to embrace lower prices as company generate lower revenue
  • Normalization could mean a period of consolidation among larger companies
  • More M&A but also there is a growing risk of bailout among companies
  • On the positive side, it is election year so everything should remain rosy right?

Taking a look at some monthly charts which is of interest:

  • Elliott wave count undergoing wave 4? Or we are in a process of wave 5 completion?
  • Election year – does the US economy really need a strong USD?

  • Potential double bottom which suggest this could go higher
  • SNB wants  weaker Swiss Franc to remain competitive
  • A retest to 50% Fib by 2016?

  • At resistance here?
  • Potentially forming a large inverse head and shoulder
  • Current price suggest we are at neckline
  • Only a break below 116 can suggest that we are heading lower to form the right hand shoulder?

  • Holding on the trend line but failure there suggest a retest at 0.600
  • Previous Head & Shoulder may have played out and reached the target

  • Slight similarity to the AUD/USD but has yet rekindle with the long term trend line
  • Nice confluence with 61.8% Fib and the long term trend line may suggest a potential reversal zone?

  • Range trading into next year?
  • Given that AUD/USD may have reached key support, while NZD/USD has rooms to fall – does this suggest a buy here?
  • A potential Inverse head and shoulder formation here to suggest a buy able low?

  • No way to call a bottom but sterling has the potential to repeat 2002 outbreak higher
  • Chart seems to suggest a retest much lower first but mindful that BOE could do a rate hike in 2016
  • Can it get back to its former glory?

  • Ongoing QE program will take EUR/USD to parity even though current chart action suggest a potential bottoming phase
  • 1.0350 seems to be the next stop if price action head lower
  • A tagged on lower of the channel could trigger short covering at least in the medium time frame

  • EUR/GBP may have found a strong support off the rising trend line
  • Only a solid break and close below will undermine the current setup
  • However, given the divergence of weaker Euro going forward and strong Sterling – we cannot rule out this continuous trend

Please let us know your thoughts and if you have a different view on some of the above charts.

 

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