EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Continues to See Choppiness

EUR/USD Technical Analysis

The Euro rallied ever so slightly during the early hours on Tuesday as we continue to hang around the 1.05 level, which of course is a large round, psychologically significant figure. This is a market that I think continues to see a lot of sideways action just on top of what essentially has been a major floor the last couple of years. If we can turn around and rally from here, the 1.06 level above is a barrier.

If we can break above the 1.06 level, then I think it allows the euro to lift towards the 50-day EMA. On the other hand, if we break down below here to reach the 1.04 level, then we could really start to fall apart. All things being equal, you need to keep in mind that this is non-farm payroll week, so that’ll have a major influence on the US dollar.

USD/JPY Technical Analysis

The US dollar has drifted a little bit lower against the Japanese yen, as we continue to see a lot of noise in this pair. That being said, it does look like we are, at least in the midst of trying to form some type of bottoms. Keep in mind the interest rate differential does favor the United States, but recently there’s been a little bit of perhaps panic profit taking would be the best way to describe it.

Ultimately, if we can break above the 200 day EMA and stay above there on a daily close, I think I’d be much more willing to put money to work in this pair. As far as shorting is concerned, I really don’t have any interest right now.

AUD/USD Technical Analysis

The Australian dollar has gone back and forth just below the crucial 0.65 level. The 0.65 level has acted like both at support and resistance multiple times over the course of the last year or so. And I think ultimately, you’ve got a situation where traders will continue to look at this region as the bottom of the market.

If we were to break down below the 0.6450 level though, that could open up even deeper selling. Keep in mind the risk appetite will have a major influence on what happens here, but as things stand right now, it still looks very much like a fade the rally at the first signs of exhaustion type of market.

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