EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Continues to Show Life

EUR/USD Technical Analysis

The euro rallied ever so slightly in the early hours here on Monday, but we also continue to hang around the 1.05 level. The 1.05 level of course is a large round psychologically significant figure and an area where a lot of people have been going back and forth. I still believe that with all of the economic problems that the EU faces right now, it makes more sense that we fade short-term rallies that show signs of exhaustion. But I really don’t know that we go anywhere until Thursday for a bigger move, at least, because of the Federal Reserve interest rate decision on that day.

USD/JPY Technical Analysis

The US dollar continues to climb against the Japanese yen as we are now breaking the 154 yen level. Ultimately, this is a market that has been very bullish for quite some time now, had a significant pullback to the 150 yen level, only to turn around and show strength again. In general, this is a market that is going to continue to play the interest rate differential, but keep in mind that the United States and Japan both have central bank meetings and announcements later this week, so we could see a little bit of noise overall. I still longer term believe that this is a pair that goes higher.

AUD/USD Technical Analysis

The Aussie dollar looks rather negative, but the 0.6350 level offers a bit of support. This is an area that’s been important for quite some time and therefore, it does make sense that most participants are going to pay close attention to it. If we break down below the 0.60 level, that could lead to a pretty significant breakdown completely. I don’t know for there yet, but at this point, I think the best way to play the Australian dollar is simply wait for rallies and then fade those rallies at the first signs of exhaustion.

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