EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Rallies Early on Wednesday

EUR/USD Technical Analysis

The Euro has drifted a little bit lower in the early out on Wednesday, but as you can see, the question now is whether or not we are trying to form some type of double top. You really can’t play the market based on this, but it does suggest that we have gotten a little too far ahead of ourselves. That being said, full disclosure, I’ve thought about this for three or four days now. The question will be whether or not the CPI numbers perhaps change the complexion of this pair, because if inflation in the United States is higher than expected, that could cause a bit of a plunge.

Keep in mind that the German situation with their bonds continues to be a major factor here as well, as the interest rates in Germany have shot straight up in the air, as it looks like they’re going to be releasing quite a bit of issuance. The stochastic oscillator is crossing in the overbought condition, but it has been for a while. So, we’ll just have to wait and see. I certainly wouldn’t be a buyer in this area. I would like to see a pullback before I even consider that.

USD/JPY Technical Analysis

The US dollar has rallied quite nicely in the early hours on Wednesday against the Japanese yen and we are now threatening an area that could be thought of as previous support and resistance, right around 149 yen. It’ll be interesting to see if we can break above here, but really we don’t get the all clear to go long until we break above 151.33 yen.

Above that level then I think the whole thing changes. We are still very much in a downtrend. And at this point, I think if we do get a turnaround in the trend, it’s probably more or less going to be a basing pattern that we’re forming here.

AUD/USD Technical Analysis

The Australian dollar is a little bit weaker during the trading session, but quite frankly, out of all of the major currencies against the US dollar, the Australian dollar has been the biggest one to cause suspicion all along. Australia, of course, is highly levered to China, and there are a lot of concerns about the Chinese economy because of the global economy. So it makes sense that the Aussie just continues to go back and forth in the same range, with the 0.62 level on the bottom as support and the 0.64 level on the top as resistance.

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