EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Rallies into FOMC Meeting

EUR/USD Technical Analysis

The euro has fallen rather significantly during the early hours on Wednesday as we continue to hang around the 1.09 level. That being said, keep in mind that the FOMC meeting is, of course, later today, so I wouldn’t read too much into the price action other than there’s probably a lot of position squaring going on. At this point, if we break below the 1.08 level after the press conference, then I think the euro has much further to fall. On the other hand, if we break above the 1.0950 level, again, after the press conference, then I think the euro is going to go looking to the 1.12 level.

USD/JPY Technical Analysis

The US dollar has risen significantly against the Japanese yen but has not broken above the 150 yen level yet. The Bank of Japan cited a whole litany of problems out there that might keep its interest rate hiking cycle on hold, not the least of which would be tariffs coming out of the United States. Furthermore, you have the FOMC meeting later in the day, so this is going to be ground zero for the action at the end of the session. Pay close attention to the 151 yen level because a break above there would have this market looking to go much higher. If we drop below the 148 yen level, then we probably have further downside.

AUD/USD Technical Analysis

The Australian dollar has fallen a bit during the early hours on Wednesday as we continue to trade in a range, the range is defined by the 0.62 level on the bottom and the 0.64 level on the top. It does look like the range is trying to hold, but again, Jerome Powell could change that in his press conference. We’ll just have to wait and see.

If he sounds extraordinarily dovish, then we have a situation where this market could take off because it would lend itself to cheaper US dollars and perhaps higher commodity prices, which of course would help the Australian dollar. If he’s extraordinarily hawkish, that puts downward pressure on this pair.

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