Forex: "The Markets Are Getting Exciting!"
Our Senior Currency Strategist explains why
Watch this new interview to learn which markets Jim's keeping his eye on.
P.S. Below the video, look for details on instant, free access to Currency Pro Service forecasts now through July 22, as part of EWI's Forex Free Week.
[Editor's Note: A text version of the interview is below.]
Alexandra Lienhard: I'm Alexandra Lienhard for ElliottWaveTV and today I'll be talking with Jim Martens, Elliott Wave International's Senior Currency Strategist.
But a brief editor's note before Jim joins me: Elliott Wave International is currently hosting its popular Forex FreeWeek. Be sure to check out the link below to get free forecasts for 11 popular FX pairs, now through July 22.
Now Jim, onto today's interview. We're living in a post-Brexit world. In your view, did forex markets change since the vote, or did Brexit not really have an effect on FX overall?
Jim Martens: Well, from my point of view, it made no difference, overall. We've spoken about this in the past: We expected the recovery in cable from May to prove corrective -- and it did. Markets started back down right after the result of the vote were announced. It was a sharp, almost historic decline. There was a lot of chatter about. But it was something that we were expecting all along. In our minds, it made no difference at all. The market was headed where the market was headed. Regardless of what news came out in the marketplace.
Alexandra: And in recent analysis, you've been stressing the British pound, the yen and the euro. Anything standout for you in those specific markets? Or as a group?
Jim: Well, they're all at interesting positions. I believe the dollar is resuming a broad-based advance relative to all its competitors. We look at cable, for instance, to start with. We'll see that it's gone nowhere in the last few weeks or so. We had that historic move after the vote and it's held its ground since, but I think that's just a pause in a larger downtrend. So again, it's no change in our thinking there. And when I look at something say, like euro/dollar, which is popular amongst traders, we look at the same sort of thing. It's been going nowhere, there's been a lot of volatility, which really stretches back more than a year now. We've been tracking it and calling the ups and downs of the market, but I think that's coming to an end, and there's going to be a substantial move ahead. It could be underway, and if it's not already, it's soon to start from nearby levels. The markets are getting quite exciting from this point on.
Alexandra: So let's broaden out. Looking bigger-picture, what are you watching? What are you keeping your eye on in the months and quarters ahead?
Jim: Well, one market where our view has changed has been dollar/yen. We've been looking for a bottom, yet the market has continued to decline. We failed to see evidence that the turn had occurred, and I like to wait before I change my view, or change my opinion of the market trend, until I see evidence that a change has occurred. But we may have finally seen that in the last few weeks. It has rallied sharply, so I put that back in the camp of dollar strength. If dollar/yen is advancing, that's dollar strengthening, that's the yen weakening. So it's falling into place in the rest of the picture, as I see it. And that is that the dollar is going to be strong going forward. That's going to be the story. You're bound to hear about that over the coming months. We'll hear about it on the equities side, that it's pressuring corporate earnings, and what are we going to do about that. But it's going to be a broad-based move relative to all of its competitors.
Alexandra: Well, FX has always been one of the more volatile asset classes out there. Thanks for chatting today, Jim.
Jim: My pleasure, Alex.
Alexandra: Now through July 22, you can get free access to our premium grade Currency Pro Service during Forex FreeWeek. Follow the link below to get free forecasts for 11 popular FX pairs.
Thanks for watching ElliottWaveTV.
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