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

EUR/USD Technical Analysis

With the shortened week, the US news is going to be compressed. The FOMC meeting minutes come out late during the trading session on Tuesday and of course we get consumer confidence numbers. So maybe that is part of what has triggered a little bit of short covering here in this pair. Furthermore, we also have the core PCE price index numbers coming out on Wednesday, which is a indicator that the Federal Reserve pays close attention to.

With everything being sold off as it has, it doesn’t surprise me that we would see a little bit of a bounce in favor of the euro against the US dollar. But I also recognize that there is a significant amount of pressure above and therefore I’m looking for signs of exhaustion after a short term rally to take advantage of to start selling again. It is worth noting that we have been at the bottom of a huge range for the last couple of years. But fundamentally speaking, I still favor the US dollar.

USD/JPY Technical Analysis

The US dollar has fallen against the Japanese yen as it looks like we are digesting still and just trying to sort out whether or not we can get some type of momentum. With the give back in the US dollar against the Euro, it’s not a huge surprise to see that it’s done the same thing against the yen. I think this is just profit taking in the greenback at the moment and whether or not it can hang on to the momentum against the Japanese yen remains to be seen, but certainly, I don’t favor shorting this market. We may have a couple of days’ worth of sideways action here.

AUD/USD Technical Analysis

The Australian dollar initially plunged but is turning back around to show signs of life again. This area right around the 0.65 level continues to be massive support, and I do think that support extends down to the 0.64 level. So, with all of that being said, this is a market that, given enough time, I would expect a little bit bigger of a bounce, but ultimately this is a scenario where traders probably are still looking for rallies that can fade eventually, perhaps closer to the 0.66 level and the 50-day EMA after a short-term bounce. Nonetheless, this is more or less about the US dollar getting exhausted than anything else from what I can see.

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