Global Market Outlook – by 1 Savvy Trader

Forex, Inflation, and Equities Global Market Outlook (3–6 Month Focus)

by the Savvy Trader

As global macro forces realign, a window opens for potential inflection points across FX, equity indices, and broader economic conditions. Below are high-conviction levels, directional probabilities, and macro-musings across GBPUSD, EURUSD, USDJPY, inflation dynamics, and equity forecasts over a 3–6 month timeframe—with an eye on the structural macro undercurrents shaping the path ahead.

GBPUSD: Bullish Potential with Sigma-Event Possibility

Analyzing both GBPUSD and USDGBP (the reciprocal view) confirms a consistent directional bias: once the 1.3550 level is cleared, a multi-phase rally could unfold. Initial hesitation may occur around 1.3600, but that likely evolves into acceleration toward:

• 1.3815
• 1.4150–1.4206
• 1.4405

A true sigma event—an extreme, less probable but impactful move—could carry GBPUSD as high as 1.5200.

This upper-end scenario would likely correlate with a structurally weaker USD and/or a sustained global risk-on phase. Yet, one must remain vigilant: should exogenous shocks emerge (e.g., a surprise “rabbit from the hat” from DJT), dollar strength could reassert violently.

GBPUSD MONTHLY CHART

This Amazing Trader chart was added by global-view.com

EURUSD: Incomplete Structure Before the Next Leg Higher

While the bullish roadmap for EURUSD appears intact, important levels remain untapped:

• 1.1746 – A target not yet reached.
• 1.2100 – A plausible medium-term resistance.

If the GBPUSD scenario plays out, EURUSD could be pulled higher into the 1.2700–1.3000 zone, particularly under synchronized USD weakness. However, the pair remains vulnerable if USDJPY executes its reversal thesis.

EURUSD Monthly Chart

This Amazing Trader chart was added by global-view.com

USDJPY: Final Leg Before Massive Dollar Strength

The anticipated move toward 132–128 in USDJPY appears key. Once this demand zone is tagged, the expectation is for a powerful USD rally, which would have profound implications:

• GBPUSD and EURUSD would likely reverse lower.
• The USD’s global dominance would reassert, potentially pressuring EMFX and commodities.
• This could be a USD-led tightening impulse for the world.

Post-132/128, the roadmap suggests bullish targets in USDJPY of:

• 176
• 185
• 201
• 224

Such a surge would likely signify the U.S. exporting inflation aggressively—a move with mixed implications for domestic production and policy.

Note: The last level of support I have – but then what do I know – is 141  (updated   4/29 – I believe this is now 142)

This Amazing Trader chart was added by global-view.com

Inflation & Deflation Dynamics: The Next Twist

If USD strength reemerges violently (as above), the U.S. may inadvertently export inflation while dampening it domestically. This scenario raises fundamental questions:

• Why manufacture in the U.S. if a stronger USD undermines competitive advantage?
• Could corporations respond by mothballing overseas plants to hedge supply chains?

Importantly, U.S. house price inflation may remain a “positive” form of inflation—particularly if wages catch up. But here’s the twist:

Deflation could follow after one more inflationary impulse.

Driving forces:

• 2+ million unemployed (labor softening)
• Lower gasoline prices (visible on current charts)
• USD strength (disinflationary for imports)

Post-COVID, corporations locked in five years’ worth of price hikes in a single year—those pricing dynamics can’t be repeated forever. Once margins peak and labor softens, deflation follows.

Equities: Multi-Year Targets Remain Intact

Despite volatility and cyclical corrections, equity indices remain in a secular uptrend. Near-term pullbacks are likely, but the long-term roadmap points to significant upside:

Dow Jones Industrial Average (DJIA)

• Near-term floor: 32,000–34,000
• Long-term target: 52,151

SP 500

• Support: 4,894.50
• Long-term target: 6,890.25

The next true crisis is not anticipated before 2032—a long-standing cycle inflection point. Until then, equities may climb a wall of worry amid inflation, policy shifts, and geopolitical tension.

Stay Flexible, Watch the USD

• GBPUSD and EURUSD bulls must watch USDJPY for signs of reversal—it’s the “pivot” for the next USD leg.
•
• Equities may correct, but remain in structural bull territory.
• Inflation has one more leg, but deflation follows via labor and currency dynamics.
• The global macro chessboard is shifting—expect a shakeout, then opportunity.

The Savvy Trader is a long-time and highly valued member of the global-view.com community