Markets Outlook Fundamental & Technical Considerations w/c 18th December 2016

FX:

Following the FOMC’s permission slip on Wednesday night, the USD’s barnstorming, ripsnorter rally continues, leaving nearly all currencies in its wake.

There is a lot of talk currently about a possible EURUSD run on parity which would seem very possible in the near to medium term.  Our long-term target remains low 0.80’s for the pair, as projected by the charts.

 Yen weakness continues and we expect further upside to, e.g., USDJPY, even after such a strong rally. 

The Aussie and Kiwi now look particularly vulnerable, having confirmed their respective down trends on a long term basis last week. 

I prefer to play Aussie, Kiwi and Yen weakness against the British Pound with longs taken early November in GBPAUD, GBPNZD and GBPJPY all performing well.  I am looking for pyramiding opportunities to increase leverage further as I feel there quite some way to run in all of these pairs.  I anticipate holding all three pairs through Q1 2017.  Of course, there are many a potential curveball en route (e.g. Brexit).