EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar is Mixed Early on Monday

EUR/USD Technical Analysis

The Euro initially did rally a bit against the US dollar, but it has given back those gains rather quickly as we are essentially sitting somewhat unchanged. The 1.05 level underneath continues to offer support, and I think will continue to be thought of as important, especially when you zoom out on the longer term charts, you can see that it has been support going back about a year and a half. So, it’ll be interesting to see how that plays out. If we can break above the 1.06 level, then it opens up the possibility of a move to the 1.0750 level.

USD/JPY Technical Analysis

The US dollar has rallied rather significantly against the Japanese yen again, as it looks like we are going to try to break back above the 155 yen level. If and when we do, then I think we will eventually challenge the 156.79 level, and then go looking to 160 yen. There were some concerns about the Bank of Japan becoming a little bit more hawkish, perhaps mentioning a rate hike in December, but they did not, so we’re already seeing this knee-jerk reaction being turned around, and therefore I think we go right back into the carry trade buy and hold scenario.

AUD/USD Technical Analysis

The Australian dollar initially did try to rally against the US dollar, but it has given back those gains to show signs of hesitation near the 0.65 level. At this juncture, we are threatening a pretty significant move lower, but right now, I think we’re probably going to be more likely than not just going sideways, trying to figure out what to do next. For what it’s worth, the so-called death cross, when the 50-day EMA crosses below the 200-day EMA on the chart has just happened.

That’s typically a very negative sign, but I’ll be the first to tell you it’s typically a pretty late one, so you have to be careful with that. But nonetheless, this is a pair that looks like you are going to continue to fade rallies at the first signs of exhaustion more than anything else.

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