EUR/USD, USD/JPY and AUD/USD Forecast – Dollar Strengthens in Early Trading on Monday

EUR/USD Technical Analysis

The euro plunged to reach the 1.05 level early during the trading session on Monday as we continue to see the US dollar strengthen overall. That being said, it is worth noting that the 1.05 level has been significant support. So, it’ll be interesting to see if that can continue. On the other hand, if we do bounce from here, the 1.06 level has to be watched very closely as it is a short term barrier. Anything above there could get a bit of a relief rally going.

USD/JPY Technical Analysis

The US dollar has rallied a bit against the Japanese yen, but you can see that we are struggling with the idea of breaking above the 200-day EMA. There are a couple of PMI numbers and of course the jobs numbers coming out of America this week, so this might be the week we turn things around.

We’ll just have to wait and see. With the recent sell-off though, it will more likely than not be somewhat noisy. So be prepared for volatility. If we were to break down below the 149 yen level, then we probably have another 200 pips to the downside.

AUD/USD Technical Analysis

The Australian dollar has fallen again, right along with the Australian’s inflation and the monetary policy as far as interest rates are concerned. So, it does make a certain amount of sense that the Aussie is on its back. Also keep in mind that the Australian dollar is essentially a proxy for China and there are some real concerns about the Chinese economy right now.

So, with all of that being said and the fact that there are plenty of geopolitical worries as well, it makes sense that the US dollar remains pretty resilient. The 0.65 level is an area that a lot of people will be paying close attention to as it is a large round psychologically significant figure and an area that’s been supported multiple times. As things go right now, this looks like a market that really wants to go sideways more than anything else.

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