EURO/USD

Look at the monthly chart of EURO/USD.
Low 0.64552 (Feb-1985) – high 1.4575 (Aug-1992) :up trend, period 7.5 years.
High 1.4575 (Aug-1992) – Low 0.82200 (Oct-2000) :down trend, period 8.17 years.
Low 0.82200 (Oct-2000) – High 1.60380 (Jul-2008):up trend, period 7.75 year.
Then, suppose, now is kept on down trend (more economic news and policy , business deal and technical chart back up this down trend prediction), we assume the target value of EURO/USD as what I posed year(s) before is 0.88 :-

High 1.60380 (Jul-2008) – low 0.88 (which year ?)

As observations, down trend is around 8 year, up trend is around 7.5 year, the starting year of this down trend is Jul-2008 , then the end of the trend shall be year 2016-2017 ! Apart from today only 3 full year and more. Now EURO/USD 1.22802. From 1.22802 to 0.88 , total 0.34802 reduction (28% deprecation) within 3 year. Is it too fast and reasonable ?

If you looking back at last down trend period Aug-1992 to Oct-2000, within the last four years of the cycle, EURO still went 1 year retrace and then drop to lowest point (0.82200). 1.0428 (Aug 1997) retraced to 1.24020 (Oct 1998), it took 1.3year. After that, it dropped to 0.8800 on Oct 2000 (2 years). That is to say, within 3.3 year it went through a retrace and then a last drop of 29%. Hence from now, end of year 2014 to end of year 2017 or beginning of 2018, there is a possible of 1 year up trace and 2 year down trend.

However, this assumption will treat as confirm by me only if EURO/USD first breakdown 1.15.
Coincidently, it matches with what I have predicted dollar rate breakup above 90 and then retracement. A break of dollar rate of 90 will trigger a targert for 104. After EURO/USD reaches 0.88, my next assumption will be up trend and target for EURO/USD 2.0 .

Finally if you relate EURO/USD monthly chart with Gold/USD monthly chart, you will find that they are with the same pace. i.e. EURO down , Gold down. Euro up, Gold up. If Euro is 0.88 on the chart, Gold is around 650- 700 ! A more drop then my previous assumption of Gold target for 980 ! But 650-700 assumption will be under observation before decision make.

Will you buy EURO at 0.88 for 127% return after 2017 for another 8 years investment ?

Gold target to 1420 shortly. Will it down again to 980 ,then….

Gold, by the indication of the weekly chart, breaks recently the 50WMA which is at 1297. It has been more than 1.5 years spot gold being suppressed beyond this trend line. If it follows gold chart characteristics, it shall boost up to 1420 shortly swirling up associated with weekly, daily or 8hour 5WMA and 10WAM. Tough of those 5WMA and 10WMA or a breaking down beyond 5WMA and 10 WMA are good buying price.
How this target be measured ? Taking the 50WMA breaking point 1295 as central point , before it was broken , the lowest price was 1182. An equal altitude can be measured upward from 1297
i.e. 1297 + (1297-1182). It is around 1412 and is closed to the high 1433 on 26-Aug-2013.

If the boost of gold up to 1408 (or even 1420), it will look like to form another half of a double top with left top at 1433. And if it does not break up above 1433, it is estimated to retrace down back to 1201 or below (Cause there is a distinguish closing gap at 1201 on last day of year 2013. Will it be a indication to investors that the lowest point of 2014 not yet appeared even it boost up at the first quarter of year 2014) ?

Base on the market sentiment recently that lower interest rate will sustain for a while, investors are attracted to shift money to gold to avoid “inflation”. Assume USA economy is still getting better for the coming quarters and FED is sustained the lower interest rate for awhile, FED will still has probability to increase his extraction of money from open market, investor will shift money from gold to other capital market , gold price is then fell… to 980 (really ? the 200WMA of monthly chart, the target of double top at 1182 – (1420 -1182) ? ) . With increasing in extracting money from market, with increasing in falling in gold price until FED stop or finish . Then , I assume that FED still keep the interest rate at lower level . At moment , gold is used to be tools for inflation again for a long time and boost up back to 2000 again.

(Today, a high 1332 at early Australia time happened but not appear in Europe , USA, ASia market is an indication of further up in the coming future. A breakdown to 1311 after Asia market time 8:00GMT (10 WMA of 8hour, 5 WMA of daily) is good buying price. Now , USA and Europe trading zone (15:30 GMT) gold is 1324. Stop lost shall be placed at 1297).

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My Long Term Prediction of dollar index

I find dollar index seem to raise to 89 – 90 from the daily chart. And, after reaching 89.6, it seems to trigger another double bottom to 104 (This, let’s prove it in the future). Why ? I try to find out a reasonable policy why US government to do so.
Trying to explain the situation by substituting through money market operation – What impact to treasury bond market if dollar becomes strong.
Strong dollars result in higher rate and low bond price in Treasury Bond Market. Price drop (i.e. low price), higher yield than market interest rate. It attracts investors and corporate investors to buy treasury bond. That applies government’s action to withdrawing money from market – selling bond exchanges cash flow back to FED. And at the same time increases the government operation cost.

A serial reaction is in US stock market, as investors move money to bond market and US Government will sell all stocks of AIG (may be it already sold all back to AIG and one day market will react more negatively when it formally discloses). Moreover, actually, Dow Jones has complete the double bottom target. A trial bomb missiles from North Korea on the followed Saturday coincidently DOW Jones has reached this target position on the same week. Is it a signal to world investor to that “hidden hand” in the market has complete his tasks ? Followed by a replacement for coming two years, I have a strong feeling that DOW JONES will down as what Hong Kong Asia Financial in 1997- 2003. Hong Kong HSI down to 6xxx after reaching a submit of 18xxx in 1997, return and break the submit quickly on the next year 1998. But gradually down back to 8xxx in the come few years. DOW Jones top at 14198.1 at 2007 and drop due to financial tsunami, climb up to break that high to 15521 this year (2013), then will it drop back to around 10000 ?

It seems that gradually dollar twist up recently with the reasonable down of EURO dollar. I find Euro continue drop to 1.27, it will touch the 200 WMA line of monthly chart. If it toughs that line again together with a treble top form , it will fall to 0.88 (a close price gap there). Then conclusion to dollar and EURO is 104 and 0.88 (even down to 87.12) respectively.

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