5 Minutes Read
Bullish on dollar; expect all-time high for gold in 2 years, says Paul Ciana of BofAML
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
It is almost the end of 2019 and various reports of where the currencies and commodities are likely to trend in 2020 are out. Paul Ciana, Dir-Research, BofAML is bullish on the dollar. He of the belief that dollar is still in an uptrend and is likely to remain so. “We expect something like Euro …
It is almost the end of 2019 and various reports of where the currencies and commodities are likely to trend in 2020 are out. Paul Ciana, Dir-Research, BofAML is bullish on the dollar. He of the belief that dollar is still in an uptrend and is likely to remain so.
“We expect something like Euro dollar to suffer with a potential fall to about 1.08, even to 1.06. Now 1.08 is big level in the euro-dollar chart because that is the gap that was formed in April 2017 when the French election occurred and Emmanuel Macron won. The rule of thumb is that eventually gaps are filled in technical charts and that is one that we are certainly targeting. We enter the New Year actually short euro dollar to reflect the long dollar view in G10,” said Ciana in an interview with CNBC-TV18.
With regards to dollar-INR, he said, “Dollar-INR over the course of the medium term, it has actually formed two bullish patterns. So there was the declining wage pattern that formed in the middle of last year when spot rate came down to about 69-70, based out and rallied and then just more recently it formed a double bottom of the 50 week moving average with two bullish reversal weeks inside that pattern.” “So, looking back at the effectiveness of these bullish reversal patterns and the overall context of the two larger bullish patterns, I am biased to think that dollar-INR moves upwards of 75-76 per dollar in 2020 year.
Talking about metals, he said there is long term opportunity for the metals, especially on the precious side. “During 2019, we called for the start of the secular bull market in gold prices and the prices surged. “If this is in fact a secular bull uptrend in gold prices, they should make new all-time high in the next two years. This year in 2020, we are forecasting a gold target of USD 1,690 per ounce and maybe USD 1,750 per ounce and over the course of next few years it can get up north of USD 2000 per ounce.”
With regards to crude prices he said, “Our tag line was, ‘Buy gold on the dip and sell oil on the rip’. The reason for that being the long-term charts for gold was securely bullish, while the oil charts were the exact opposite. So, there is lot of bearish indications that suggest rally should be sold into.”
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