EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Sliding in Early Trading on Monday

EUR/USD Technical Analysis

The euro initially gapped lower to kick off the trading week but has turned around to start rallying again. Because of this, it looks as if the trend is going to at least attempt to continue. But I think at this point in time, a pullback is probably necessary. While the market can continue to go upwards, that doesn’t necessarily mean that there is a lot of momentum still to be found. I suspect this week will be just as noisy as many of the others, but sooner or later I do think a pullback shows up. The question at that point will be whether or not the 1.12 level holds out support. It does look like we are trying to get back towards the 1.15 level, but again, I just don’t like chasing the trade.

USD/JPY Technical Analysis

The US dollar has fallen against the Japanese yen only to bounce near the 142 yen level. This is an area that was important previously so this should not be a major surprise. But at this point in time, I think any bounce you have to look at with a bit of suspicion, especially near the 146 yen level, an area that was previous support. If we break down below the 140 yen level, then we go much, much lower.

AUD/USD Technical Analysis

The Australian dollar has rallied a little bit in the early hours of Monday, but out of the three pairs covered here, this is the one that is by far the most heavily overextended. The 0.64 level looks to be a major barrier, with the 200 day EMA in that area as well. So, I do think that a pullback is coming in this pair and out of the three, this is the one that I think probably needs it the most. But that doesn’t necessarily mean that we’ll get what makes the most sense.

Keep in mind that the Australian dollar is heavily levered to the Chinese economy. And that, of course, is something that right now, with the trade spat, is not necessarily a bonus.

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