EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Continues to Grind Back and Forth

EUR/USD Technical Analysis

The euro has fallen a bit against the U.S. dollar as we continue to test the 1.05 level. The 1.05 level, of course, is a large round psychologically significant figure, but it’s also an area where we have seen a lot of action in the past. Furthermore, the stochastic oscillator is crossing over in the oversold condition, suggesting that a bounce is somewhat imminent.

Whether or not that actually comes through remains to be seen, but during the next couple of days, I would anticipate seeing a certain amount of interest in this market, perhaps for a short term, short covering rally. If we do break down below the 1.05 level though, that means the US dollar is probably going to be destroying a lot of things, not just the Euro in this case.

USD/JPY Technical Analysis

The US dollar has dipped against the Japanese yen, but then turned around to show signs of life. And at this point in time, I do think that this might’ve been a short-term reaction to Vladimir Putin signing an executive order authorizing the use of nuclear weapons in a more expanded role in reaction to the NATO weapons.

This could have been a safety play. But really at the end of the day when you look at it, it doesn’t matter. This is an uptrend that’s been very strong for a while, and I just don’t see that changing. If we can recapture the 155 yen level, that’s probably the signal that we are going to go much higher. On pullback side, we’d expect to see a lot of support near the 152 yen level.

AUD/USD Technical Analysis

The Australian dollar is hanging around the 0.65 level, but much like the euro is seeing the stochastic oscillator crossover in an oversold condition. If the market can break higher from here, we would have a little bit of a relief rally, I suspect, but I’d be surprised to see the market break beyond 0.6650, which is basically where the 50-day EMA and the 200-day EMA indicators have just crossed. If we break down from here, the 0.6450 level has been support, but that opens up another 100 pips to the downside if we get below there.

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