Market forecast update
In this update GFC would like to go back and remind our readers of some forecasts made over a month ago in GFC’s April 2nd article “Positioning for (Intermediate-Term) Dollar Weakness” and provide an update to how some of those forecasts have panned out. Market dynamics are always fluctuating and we would like to update our readers on what market moves they should expect next.
The first chart shown below is when we advised our readers that a top in the dollar had likely occurred and that they should expect to see a weakening U.S. dollar index in the weeks ahead.
Below is what unfolded after GFC made this market call….
As shown in the above chart, shortly after this GFC forecast the dollar to weaken, it finished retraced slightly higher and then dramatically sold off and prices immediately sunk to our cited target range. In the near term we expect the dollar to bounce from this support level, but depending how volume characteristics evolve over the coming trading days, the dollar may have further to fall. This was a minimum target objective that has been achieved. If any compelling market opportunities develop regarding the dollar we will update you.
The next chart we would like to update is our forecast for oil. Last Month GFC predicted oil to rally as believed it has formed an intermediate term bottom and was likely to rally as the dollar weaken. After its initial bounce off the bottom, oil completed a 50% retracement which is where we predicted oil to rally to over $58 as seen in chart from April 2nd below.
Again, this is what occurred in Oil after GFC predicted it to surge…
Furthermore, it worth highlighting that while it was rallying, Oil formed a very distinct support trend-line which experienced multiple touched. Zooming in on a 4HR chart highlight this support line which was broken yesterday. We expect oil to substantially pull back to at the last the $56 area and possibly much lower over the intermediate term.
Our forecast for a bull rally in gold has not materialized thus far. We are still anticipating there to be a high probability that gold will attempt a rally towards the $1,300 level. It should be noted that gold hasn’t broken down out of its trading range either, which implies that it has been build cause to rally soon. We will keep monitoring these market developments as they occur and do our best to keep our readers posted.