EUR/USD, USD/JPY, AUD/USD Analysis – US Dollar a Bit Sluggish

EUR/USD Outlook

The Euro initially did rally a bit during the early hours of Tuesday but has given back gains as the US dollar flexes its muscles again, but quite frankly, it looks like we are just spinning our wheels at the moment. It is probably worth noting that the Euro sits just above the 1.08 level. The 1.08 level, of course, is a large round psychologically significant figure and an area that has been important multiple times.

Above, we have the 1.09 level offering resistance, and of course, that’s backed up by the 200-day EMA. So, I think in general, we are looking at a market that is trying to figure out whether or not it has its footing here. Are we going to continue to go back and forth and grind away or are we going to finally break out of this 100 point range will be the question.

USD/JPY Outlook

The US dollar is slightly positive against the Japanese yen but certainly lacking the momentum that it had during the previous session. That’s okay, we have broken out above the crucial 150 yen level. And now it looks like we are trying to work our way up to the 152 yen level. Short term pullbacks at this point in time should continue to see plenty of support and interest. And I think buyers will be willing to jump into the market and take advantage of cheap US dollars.

Underneath we have the 200 day EMA indicator offering plenty of support. And therefore, I think you’ve got a situation where traders will look at this through the prism of whether or not they are finding value. A breakdown below the 200 day EMA would of course be a situation where we could see further selling, but at this point in time I believe that the carry trade is very much back, and the US dollar could lead the charge against the Japanese yen.

AUD/USD Outlook

The Australian dollar on the other hand is much stronger than the Euro or the yen against the US dollar somewhat malaise-like trading early in the session because we are starting to try to differentiate between currencies against the greenback. The Aussie dollar breaking higher after touching the 0.6650 level is trying everything it can right now to confirm this area as support.

The 200-day EMA sits just above there, and I think that all ties together for a market that is trying to bottom out. However, I would have to see this market break above the 50 day EMA above in order to believe that we are ready to go higher. In the meantime, I would anticipate more of a stabilization type of move. This does make a certain amount of sense because there’s a severe lack of economic numbers coming out during the trading session just as there had been on Monday.