Long-term Dollar forecast remains on course
On October 5, 2004 we published a
report showing the next four moves the dollar would make (top chart).
First we expected a test of the key 80 level followed by a
rally to 91/92. Following that “unexpected†rally, we forecasted a pullback to
the key 85 level between August and December of 2005. Then, a renewed rally to
the 100 handle in 2006.
At the time, this forecast stood all others on their heads.
But our rational was that the US would see higher short-term and long-term
yields. Amazingly, the dollar has followed this forecast perfectly.
In the bottom chart we show the 30-month cycle bottom in
10-year Treasury yields. Note that in each case this has preceded a sharp rally
in the US dollar. As such, we remain bullish on the dollar’s prospects and think
that today’s low offered a good buying opportunity.
Regards,
Jes Black
FX Money Trends
613 4th St Suite 505
Hoboken, NJ 07030
Tel: 646.229.5401
Jes
Black is the fund manager at Black Flag Capital Partners and Chairman of
the firm’s Investment Committee, which oversees research, investment and
trading strategies. You can find out more about Jes at
BlackFlagForex.com.
Prior
to organizing the hedge fund he was hired by MG Financial Group to help
run their flagship news and analysis department,
Forexnews.com. After four
years as a senior currency strategist he went on to found
FxMoneyTrends.com – a research firm catering to professional traders.
Jes
Black’s opinions are often featured in the Wall Street Journal, Barrons,
Financial Times and Reuters. He has also written numerous strategy pieces
for Futures magazine and regularly attends industry conferences to speak
about the currency markets.