EUR/USD and DXY Forecasts

Following is Regression analysis forecast from averages 1 year, 2, 3, 5, 7 and 10 years. Evident from every average 1 year to 10 is EUR/USD and DXY cannot remain in present positions. Current Correlations warn of a serious breakout. The more EUR/USD and DXY range, the more severe will be the breakout. Current EUR/USD and DXY prices are operating almost on a 1 to 1 relationship. This cannot hold. DXY is overbought, EUR/USD oversold. DXY averages from 2 year to 10 are still in the 80’s. The 2 year average for example is located at 89.95 and current price at 98.00 is almost 1000 pips above. The 10 year average at 82.37 is 1600 pips above its average.
Since 2008, the market shifted to DXY ascendancy and saw a 105 top that hasn’t been seen again. After 7 years in the current cycle, at some point soon, EUR/USD will begin its ascent. My view is opposite to all the rest. I see EUR/USD heading higher.

For each average, a mean is offered and hi / lo ranges.
1 year average mean 97.44, high range 97.90, low range 96.77.
2 year average mean 97.34, high range 97.84, low range 96.83.
3 year average mean 97.27, high range 98.03, low range 96.50.
5 year average mean 96.36, high range 98.25, low range 94.46.
7 year average mean 95.65, high range 97.79, low range 93.50.
10 year average mean 94.75, high range 96.84, low range 92.65.
A range must hold because they are based on constants. If a price falls outside its ranges, then it must fall back inside.

DXY targets from averages using different metrics.
1 year target 98.32.
2 year target 97.34,
3 year target 94.40,
5 year target 90.92,
7 year target 89.45,
10 year target 88.58.

Extreme DXY prices, highs and lows.

1 year. 101.44 V 92.09, average 96.76
2 year. 112.13 v 67.76, average 89.94
3 year. 108.94 v 65.31, average 87.12
5 year. 105.51 v 61.74, average 83.62
7 year. 102.56 v 63.23, average 82.89
10 year. 101.00 v 63.73, average 82.36

EUR/USD Targets from averages 1 – 10. Vital points above 1.0956, 1.1007, 1.1100.

1 year. 1.0834
2 year. 1.0952
3 year. 1.1398
5 year. 1.1814
7 year. 1.2045
10 year. 1.2175.

Extreme EUR/USD prices, highs, lows, averages.

1 year.1.1658 v 1.0422, average 1.1040
2 year. 1.5636 v 0.8610, average 1.2123
3 year. 1.5866 v 0.9164, average 1.2515
5 year. 1.6102 v 0.9670, average 1.2886
7 year. 1.6201 v 0.9967, average 1.3084
10 year 1.6575 v 0.9975, average 1.3275

Brian Twomey, Inside the Currency Market, btwomey.com

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