EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Softens a Bit After CPI Misses

EUR/USD Technical Analysis

The euro has rallied a bit during the course of the trading session on Wednesday as the month-over-month core CPI numbers in the United States came out at 0.2% instead of 0.3%. That being said, I don’t think it changes anything long term, but it does show, or at least give a little bit of hope, to the idea that the United States economy might be cooling off a bit. We’ll see.

But the reality is that we are still very much in a downtrend when it comes to the euro and I would not be surprised at all to see the seller step into this market, especially near the 1.04 region, assuming that we even get there. At this point in time, I am looking to fade signs of exhaustion in the euro, which we are already starting to see a little bit of just half an hour after the announcement, but we’ll have to let the day play out and look for the signal.

USD/JPY Technical Analysis

The US dollar has fallen rather hard against the Japanese yen, as you would expect, but we are approaching a pretty significant short-term support level, so that’s worth watching. Even if we were to break down below the 156 yen level, the 155 yen level of course is massive support also, and therefore you need to pay close attention to that as well.

We have the 50 day EMA approaching that level, and of course, despite the fact that the CPI numbers are a little cooler than anticipated, this is still a carry trade. You still get paid to hang on to it, and the Japanese are still light years away from being able to do anything about it.

AUD/USD Technical Analysis

The Australian dollar has skyrocketed during the early hours, but again, this is another one of those I’ll believe it when I see it pairs. In fact, I need to see the Australian dollar get above the 0.6350 level to consider buying it. I anticipate that there will be enough resistance just above to cause some problems for the Aussie. We’ll have to wait and see, and this will almost certainly be driven by the 10-year yield in America, so keep an eye on that. But we’re in a downtrend, and we are in a downtrend for very real reasons. It’s not just the Fed. A lot of this comes down to China.