EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Drifts Without Direction on Monday

EUR/USD Technical Analysis

The euro rallied a bit in the early hours on Monday, as we are continuing to hang around the 1.03 level. That being said, it’s worth noting that America was offline with the Martin Luther King Jr. holiday, so I suspect at this point in time this is just a market doing what it does when there’s a serious lack of liquidity.

Now, with that being said, I do think this is a market that could very well bounce a bit for a day or two before we start selling again. The 50 day EMA sits near the 1.0450 level and is dropping. So, I think somewhere in that area, we could get a situation where traders will start to pick up cheap US dollars. I still to this day remain bearish of the Euro and still believe that we are going to parity.

USD/JPY Technical Analysis

The US dollar initially dipped a little bit against the Japanese yen but then turned around to show signs of life. At this point, the 155 yen level underneath is considered to be the support level of the range, especially near the 50 day EMA. At this point in time, the market is likely to go looking to the 158 yen level above.

Now, that being said, keep in mind that the Bank of Japan has a meeting on Friday, and that of course comes into the picture for a little bit of momentum as far as where we go later this week. I still favor the upside, although I recognize that the Bank of Japan tightening might get things a little bit negative here for a moment, assuming that they do, but the interest rate differential will still be wide enough to drive a truck through.

AUD/USD Technical Analysis

The Australian dollar rallied a little bit during the early hours on Monday as well, but again, this is going to be one of the situations like the euro. I think there just aren’t a lot of dollar buyers out there, just due to the fact that the US is offline. I think this is a market that chops around for a while, maybe rallies a little bit, and then you squash this thing like a bug if it shows any signs of exhaustion, and that’s my plan. I think that it’s possible the Aussie could drop down to the 0.60 level. The 0.6350 level above is a major ceiling in the market, especially with the 50-Day EMA sitting there.

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