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

EUR/USD Technical Analysis

The euro has rallied pretty nicely during the early hours on Monday again, as we are now testing the crucial 1.15 level. We’ve gotten here pretty quickly. And as a result, I still think there is potential for a pullback. That being said, it’s hard to short this pair. Really, I don’t think about shorting it until we break down below the 1.12 level. We could drop into a trading range for a while. We’ll just have to wait and see. Ultimately, sooner or later, the interest rate differential will come back into play, but right now this looks more or less like foreigners pulling capital out of the United States and repatriating it.

USD/JPY Technical Analysis

The US dollar has fallen pretty significantly against the Japanese yen as well, as we are now near the bottom that we had put in during the month of September of last year. If we can bounce and rally above the 143 yen level, that would be a very strong sign. However, there is the potential of a breakdown if we get below the 140 level. I do believe that 140 is crucial for longer term trading.

If we break down below there, some traders will look at this as some type of head and shoulders pattern and it could lead for a drop down to 120. If that ends up being the case, I suspect we have some type of financial crisis. So, watch that very closely.

AUD/USD Technical Analysis

The Australian dollar has broken higher against the US dollar, and it is now peaking above the 0.64 level, an area that has been like a brick wall over the last several months. We are just above the 200 day EMA as I record this, so we’ll have to see if we can stay above here because if we can, that’s not a good look for the dollar. Now, having said that, could the Australian dollar rally pretty significantly?

Well, the answer, I guess, would be yes, because the next massive resistance level would be somewhere around 0.68, where it had spent a couple of years. So, despite the fact that this has been such a brutal move to the upside, the reality is that through the prism of a longer-term chart, we would just be heading to an area of somewhat normalcy as far as trading is concerned.

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