EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Gives Back Gains on Monday

EUR/USD Technical Analysis

The U.S. dollar has given up gains against most currency pairs and of course, the euro has capitalized. Quite frankly, this is going to end up being a nice selling opportunity. The market has no reason whatsoever to bounce other than it’s gotten too far ahead of itself, and I’ll be looking for signs of exhaustion after this move. My email box is flooded with people begging me for permission to buy the euro, which of course you have.

It’s just not the correct trade at the moment. If the euro were to break above the 1.06 level on a daily close, that would change a lot, but we are quite a ways from there. I suspect we have a day or two of turnaround followed by selling pressure. This will be especially true if that jobs number on Friday comes out hot. So, I’m looking for signs of exhaustion to take advantage of.

USD/JPY Technical Analysis

The US dollar has of course tried to rally against the Japanese yen and then turned right back around, but we’re still in the midst of consolidation. It’s all about the 158 yen level right now, and if we can break above there, then the US dollar should continue to go higher. I suspect this week will be very choppy, and Monday is pretty much what I anticipated, a little bit of hesitation. That doesn’t mean that you need to be shorting this pair, it just means that buying on the dip is probably going to continue to be the way going forward at least as long as we can stay above the 155 yen level.

AUD/USD Technical Analysis

The Australian dollar has exploded to the upside, gaining 1.1% by the time New York wakes up. That being said, this is probably where we have seen the US dollar the strongest. So, if there was any place you were going to see the trade unwind, it was going to be here. I’m particularly interested in the 0.6350 level, because I think it ends up offering a nice shorting opportunity, assuming that we can get that far.

I am looking for signs of exhaustion to sell the Aussie as well. I believe that this is all just part of an oversold market, it’s an oversold bounce, and this is where experience comes in when you don’t see this big candlestick and start chasing it when you realize there’s much easier trades if you just wait a minute.

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