EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Gives Back a Bit for the Week

EUR/USD Technical Analysis

The euro had a positive week as the market reached the 1.05 level and then plunged below it, but we have popped back above there. When you look at the chart, you can see the last two years has essentially been between 1.05 at the bottom and 1.12 at the top. The question now is, are we going to bounce again? It looks possible. It looks very possible. Questions will arise on geopolitics as far as: are traders going to be looking for safety in the form of the US dollar? Or will things settle down in places like Ukraine?

The US elections, of course, have had their say in this latest sell-off, as it looks like the United States will become much more business-friendly than it has been. Europe has a whole slew of problems, so at this point in time, I think it’s still a bit of a mixed bag. Having said that, if we can break above the 1.06 level, a run toward the 1.0750 level is very possible.

USD/JPY Technical Analysis

The US dollar has plunged against the Japanese yen, but again, you have to ask the question, is this just simply a pullback in a stronger uptrend or do we fall further? If we drop below the 149 yen level, I suspect this correction becomes a little bit deeper. Overall, I think this is a market that could drop down to the 140 yen level if things keep up this way.

On the other hand, I also could make a very strong argument for consolidation between the 150 yen level and the 155 yen level due to the interest rate differential that will continue to get traders paid. All eyes at this point in time are basically on the Japanese and of course, the bond market in the United States. If yields continue to spike, that is going to cause a problem.

AUD/USD Technical Analysis

The Australian dollar has spent most of the week falling, but it turned right back around to drift to the 0.65 level. When you look at this market from a longer term standpoint, you can see just how important the area between 0.65 and 0.6250 have been. So again, this is much like the euro. I think it’s a situation where a bounce makes a certain amount of sense.

The question is, will it have any momentum, or will it stick? I don’t know about that part. If we can clear the 0.6650 level, then we could go looking towards the top, near 0.69 again, of the range, but I anticipate probably a lot of sideways action for the next couple of weeks.

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