EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Softens a Bit in Early Thursday Trading

EUR/USD Technical Analysis

The euro rallied slightly during the early hours on Thursday as we continue to see more of an uptrend play out. But ultimately, this is a market that we have to pay close attention to as the 1.15 level is a major barrier to overcome. All things being equal, the market could continue to go back and forth between the 1.12 level and the 1.15 level, but I also recognize that this is a scenario where traders will continue to look at short-term dips as potential buying opportunities.

But if we were to break down below the 1.12 level, then the market could drop all the way down to the 1.09 level. If we do clear the recent high, then we could go looking at the 1.20 level and possibly even beyond. That would be the next leg higher, if you will. Nonetheless, we are a little overextended, so I think you have to keep that in your mind, understanding that maybe some work needs to be done here to kill some of the momentum and digest some of the gains.

USD/JPY Technical Analysis

The US dollar has dropped against the Japanese yen during the early part of the Thursday session, as we continue to see a lot of back and forth in this area. And perhaps we may even be starting to see the market trying to form some type of bottoming pattern. That being said, I think we have a lot of work to do, and it may take some time to get there. And therefore, I think a lot of back and forth is probably expected here as the Federal Reserve is expected to stay somewhat tight and the Federal Reserve is definitely going to be tighter than the Bank of Japan. So really at this point in time, it does favor the dollar once other things calm down.

AUD/USD Technical Analysis

The Australian dollar initially fell during the trading session on Thursday but then turned around to rally a bit. That being said, we are still very much underneath significant resistance that extends somewhere around the 0.6440 level, which is also right around where the 200 day EMA hangs about. The Australian dollar will get hurt by the US China spat. So, we’ll have to wait and see how that plays out over the longer term. In the short term, it’s been all about the US dollar, but I do think that the Aussie probably struggles to benefit the way perhaps the Euro has.

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