EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Choppy After CPI

EUR/USD Technical Analysis

The Euro has gone back and forth during the course of the trading session on Wednesday, as the 1.06 level continues to be a major floor. The 1.06 level is an area that’s been important multiple times, so it’s not a huge surprise to see a little bit of a bounce from here. It’s worth noting that the consumer price index numbers came out as expected during the early hours in New York, and therefore I think traders are breathing a little bit of a sigh of relief.

This does set up some type of bounce, but whether or not that sticks remains a question at this point the 1.0750 level above is an area that a lot of people would be paying attention to for potential selling pressure. For what it is worth, and I’m the first to admit, I’m not a huge follower of this, the so-called death cross is kicking off during the session.

USD/JPY Technical Analysis

The US dollar initially broke above the 155 yen level only to turn around and give up gainsa and I think at this point in time, we might be getting a little overdone. We’ll just have to wait and see. If we can close significantly above the 155 Yen level on a daily candlestick, that of course would be a very positive sign and it could send this pair much higher, perhaps even as high as 162 Yen.

That being said, if we get a little bit of a short-term pullback, that’s not necessarily the worst thing that could happen. That just has this market looking like it’s going to find value, and with that being the case, I think you need to look at it through the prism of a potential buy on the dip scenario. I have absolutely no interest in trying to short this pair right now. It’s far too strong with the positive interest rate swap.

AUD/USD Technical Analysis

The Australian dollar continues to bump along the 0.65 level, an area that’s been important multiple times. And therefore, I don’t think it’s much of a surprise that we find ourselves sitting here. Whether or not we can rally remains to be seen, but if we were to break down significantly below the crucial 0.65 level, that could be ugly. On a bounce from here, we could go as high as 0.6650 and really not change much, or perhaps even as high as 0.67 after that, and still remain in the same consolidation region that we have spent most of the last year or so in.

Really at this point in time, I think the one thing that makes this pair a little choppier than some of the others is the fact that the Reserve Bank of Australia recently held tight with its monetary policy, thereby not cutting, which is something that so many of the other central banks are doing. Whether or not it’s enough to make it stronger than the dollar is a completely different question, but it may lose less.

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