Recession Probability: Recession to Persist for Next Six Months
Our recession model puts the latest probability of recession at 94 percent. There is certainly overwhelming evidence that the domestic economy continues in recession mode as both consumer spending and business investment have weakened. Key model inputs such as leading indicators and employment signal continued problems ahead.
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The Low Down on a Low Fed Funds Rate
The Fed has been on an easing cycle for many months now. At its most recent rate decision, the Fed lowered the fed funds rate by 50 bps to 1.00% and left the door open for further cuts. Going forward, we think that another 50 bps easing is in the…
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FX Forecast Update: Time for Change? Not Yet
We revised our FX forecasts in-between our regular forecast updates on 24 October; see Revised FX Forecasts: G10 and EM. Most notably, we raised all our short-term USD forecasts and pencilled in more JPY and CHF strengthening, along with more SEK and NOK short-term weakness. As risk sentiment was deteriorating…
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Euro/US Dollar Monthly Forecast
I wrote last month that ?the monthly close below the trendline that had contained price since 2002 is enough evidence to proclaim the 8 year uptrend complete. The Fibonacci zone does not begin until 1.2428. A more likely candidate for support is the 50% at 1.1486, which is also near…
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US Dollar/Japanese Yen Monthly Forecast
No change since last month: This is a chart that we have focused on time and time again. A 4th wave triangle (that took 12 years) is complete at 124.13 as a 4th wave and the USDJPY is headed lower in a 5th wave (and terminal thrust) that will end…
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British Pound/US Dollar Monthly Forecast
I wrote last month to “expect additional weakness longer term (into at least 1.70).” That forecast was far too conservative as the GBPUSD fell to its lowest level since the summer of 2002. Price is at a support line that began at the 1984 low. This line should hold up…
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US Dollar/Swiss Franc Monthly Forecast
The USDCHF is in the exact same position as the EURUSD (but as the inverse). The USDCHF is lagging the EURUSD a bit though as the pair just broke above its long term trendline (resistance in this case). The long term target is now above 1.8309. The Daily Technicals will…
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US Dollar/Canadian Dollar Monthly Forecast
I wrote last month that “the USDCAD break through its long term trendline strongly indicates that a long term bottom is in place. Former significant highs at 1.1882 and 1.2738 are bullish targets going forward.” Both targets were met and if the corrective nature of the decline from 1.6194 suggests…
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Australian Dollar/US Dollar Monthly Forecast
I wrote last month that “the initial bearish target is .7265.” The AUDUSD fell well below there and tested .60. A 5 wave drop from the top (.9856) is evident so a correction is underway. Initial resistance is the confluence of the former 4th wave and 38.2% of .9856-.6005; at…
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New Zealand Dollar/US Dollar Monthly Forecast
The minimum target of .5927 was reached and the NZDUSD continued lower, trading as low as .5386. Like the AUDUSD, an upward correction is underway and initial resistance is at .63 (Fibonacci and former resistance). .6974 is the 61.8% of the decline from .8219 and could be put to the…
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