EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Continues to Be Strong

EUR/USD Technical Analysis

The euro did rally in the early hours on Tuesday, but you can see has given back the gains as we continue to see a lot of weakness in the euro overall. The 1.03 level seems to be offering a bit of resistance, and I certainly would think that the 1.0450 level would as well, as the 50 day EMA is racing toward it. I’ve been pretty vocal about my expectations of the euro that I believe that the euro reaches parity before it’s all said and done. The question of course is, will we get a relief rally? You would normally expect that, but there’s just no good news coming out of Europe.

USD/JPY Technical Analysis

The US dollar has rallied again against the Japanese yen to break above the 158 yen level, showing signs of strength as usual and now it looks like we’re just squeezing underneath this area, perhaps waiting for some type of catalyst. That catalyst could very well be CPI numbers on Wednesday, so we’ll have to wait and see. Short-term pullbacks I think still get bought into.

With the strength of the US dollar a known quantity around the world, especially now that bond yields continue to be extraordinarily robust, the Bank of Japan could tighten monetary policy a bit, but they are light years away from doing that and any type of significant amount. So, with that, I do think it’s only a matter of time before the US dollar rallies again and breaks out to the upside, looking to reach the 162 yen level.

AUD/USD Technical Analysis

The Australian dollar did try to rally during the session on Tuesday, but as the Americans wake up, they will see that it has given all of its gains back. The 0.62 level has offered a bit of resistance, and I think you could also look at the 0.63 level and 0.6350 level both as resistance barriers as well.

As for where we are going, I think we’re going to grind our way down to the 0.60 handle in the Aussie dollar, which is a major area from the year 2020. So, we’ll see if that holds up. If it doesn’t, we could even see the market crash down to 0.55, but I think that’s probably a bridge too far. After all, it took a worldwide pandemic to make that happen.

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