EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Set to Strengthen on Tuesday

EUR/USD Technical Analysis

The Euro has plunged in the earlier hours of Tuesday as we continue to see a lot of volatility, and of course, a lot of questions were asked about where we are going next. Keep in mind that this is a pivotal week for this pair because we have the Federal Reserve on Wednesday, and we have the ECB on Thursday.

The ECB is expected to be cut, the Fed is expected to sit still, but a lot of this is going to come down to the press conference and what they choose to say. Really at this point in time though, if you want to find economic growth and strength, you look to America and you run from Europe, and that’s playing out on the charts.

USD/JPY Technical Analysis

The US dollar recovered quite nicely during the trading session on Tuesday. Still though, we see some noise above the 155 yen level. So, I think this will be a very noisy pair. I still favor the upside, but with the Federal Reserve meeting coming on Wednesday, I don’t know that you need to tempt fate here. I think value propositions probably come into play on short-term dips, but this is a market that’s going to be very choppy.

There are a lot of questions as to whether or not the Bank of Japan is seriously going to start tightening monetary policy going forward. I think at this point in time, we did see a few statements that suggested that they were pretty comfortable where they were at. So, the interest rate differential alone should drive this higher over the longer term.

AUD/USD Technical Analysis

The Australian dollar has plunged during trading on Tuesday as well, as it looks like it’s doing everything it can to get back to the 0.62 level. The Federal Reserve meeting on Wednesday will probably cause some volatility, but quite frankly, the situation’s the same. Every time the Australian dollar rallies a bit, it’s time to start looking for signs of exhaustion that you can sell into.

Keep in mind that Chinese economy is not exactly hot, to say the least and that of course has a major influence on what happens in Australia. The Federal Reserve announcement will probably cause a lot of noise, but if this thing pops to the upside, I’ll be looking to short it again.

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