EUR/USD, USD/JPY and AUD/USD Forecast – Dollar Gives Up a Little Strength on Wednesday

EUR/USD Technical Analysis

The euro rallied a bit against the US dollar in the early hours of Wednesday as we continue to see the market do everything it can to balance from the 1.05 level. This of course is a major support level on longer term charts. So, I suppose this isn’t much of a surprise. The stochastic oscillator has crossed over in the oversold condition recently.

And now it looks like the euro is doing everything it can to get to the crucial 1.06 level. I think at the 1.06 level, we’ll learn a lot about this attempt at recovery. If we can get above there, then the market truly could take off. At that point, the 1.0750 level could very well be within our sights. On the other hand, if we fail there, then it simply means that we continue to consolidate in this general vicinity.

USD/JPY Technical Analysis

The US dollar fell pretty significantly against the Japanese yen, losing over 1% by the time New York got on board. The pair is testing the 50 day EMA and has even broken below it a little bit. At this point, the 150 yen level is starting to come into focus. So somewhere between here and there, I would anticipate that we could get a little bit of a bounce.

If we don’t, that’s a very negative turn of events for this pair to say the least. The market had shot straight up in the air, so it’s not a huge surprise to see this pullback. And now it looks like we are just simply seeing some of the extreme US dollar strength being given back. Remember, Thursday is Thanksgiving in the United States, so that could have an effect on how the dollar trades overall as well.

AUD/USD Technical Analysis

The Australian dollar continues to bounce around the 0.65 level as it’s looking for a floor. Now, Australia itself, really not so much in the news, but the central bank in New Zealand did cut rates, 50 basis points, and that might have a little bit of a knock-on effect here in the Aussie dollar. Ultimately, this is a market that’s at a pretty significant support level, so if we start to see the U.S. dollar sell off against everything, we may eventually see a little bit of a bounce here, although I think it will be a much more muted bounce than the other two markets.

For a look at all of today’s economic events, check out our economic calendar.