EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar a Bit Mixed

EUR/USD Technical Analysis

The euro has risen slightly during the Good Friday trading session as we continue to see a little bit of choppy, noisy behavior. That being said, it was Good Friday, so you can only read so much into this scenario for the day. When I look at this chart, it doesn’t take a lot of imagination to suspect that we are a little overbought. So, I think ultimately, we could have a situation where traders somewhat are reluctant to get aggressive to the upside, but perhaps willing to consolidate some of these gains.

In fact, when you look at the longer term charts of the euro, there is this area between 1.12 and 1.15 that was very noisy in the past, a couple of different times. So, a little bit of a pullback, I guess, makes some sense. I’m not necessarily looking for the trend to change. I just think some sideways action is probably on tap here.

USD/JPY Technical Analysis

The US dollar has been very quiet against the Japanese yen. I think this will be an interesting pair to watch due to the fact that it has been stated by several US officials that there is significant progress in trade talks with the Japanese. So, this could be an interesting pair. The 140 yen level underneath is a significant support level that has been important multiple times over the longer term. So, I’m watching this with great interest. We are presently finding some support around 142 yen, but I think at this point in time, if we give up 140 yen, then we could see the Japanese yen strengthened quite wildly, perhaps all the way down to the 129 yen level against the US dollar.

That being said, I think as I look around the Forex world, the US dollar is at least trying to stabilize and without going too deep in the woods with the Euro Dollar situation, Eurodollar, not Euro against the dollar. Foreign reserves of US dollars will need to be adjusted due to a repatriation of funds and a warping of the demand for currencies. After all, US dollars pay most of the world’s debt. So, I do think that this has been a very impressive move, but you can make an argument that it begins to turn around. Watch carefully, 140 yen should tell you the whole story.

AUD/USD Technical Analysis

The Australian dollar has pulled back from the crucial 0.64 level. This is an area that has been rather important more than once. And you can see that Good Friday was no different. The 200-day EMA sits above there and could offer a bit of technical resistance as well. So, keep that in mind. But all things being equal, this is a pair that I think will be driven by the US negotiations with China or, at this point, the lack of them and therefore, I would expect a wild swing sooner or later as the Australian economy is so interconnected with China.

If we can break above the 200-day EMA on a strong daily close, then we could see the Aussie dollar rise all the way to the 0.66 level based on a measured move. If we break down below the hammer that formed on Thursday, that could send this pair back down to the 50-day EMA, perhaps even the 0.62 level, which was the bottom of the previous consolidation range.

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