EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Softens a Bit on Friday

EUR/USD Technical Analysis

The euro rallied a little bit against the US dollar in the early hours on Friday, as it looks like the 1.08 level will continue to offer a bit of support. This of course is a large round psychologically significant figure and an area that’s been important multiple times. So, this does make a certain amount of sense, especially considering that we have been so sold off. Ultimately, this is a market that is overdone to the downside. So, this bounce I think was probably going to be coming.

If we do rally from here and it certainly looks like that’s about to happen, I would be very interested in seeing what happens at the 1.09 level because we have the 200 day EMA sitting there. And that of course is an indicator that a lot of people could look at for potential resistance. Either way, the European Union looks as if the economy is slowing down. And at the same time, the US economy is much stronger. So, this all ties together for down pressure on the Euro, but we are overdone.

USD/JPY Technical Analysis

Looking at the US dollar against the Japanese yen, we did dip quite a bit during the early hours on Friday, but turning around, it looks like the 150 yen level is being challenged and it is being thought about. So, because of this, I think you’ve got a situation where the momentum is still to the upside in this pair, especially as the Bank of Japan simply cannot raise interest rates and the US economy continues to strengthen. Remember, you get paid at the end of every day to hold this pair, so positivity would be the way I would look at this.

AUD/USD Technical Analysis

The Australian dollar has rallied again during the day on Monday as the 200-day EMA held on Thursday and now Friday looks to be very much the same. Above, we have the 50-day EMA that could come into the picture for some type of resistance, so pay close attention to that.

I do recognize that the Aussie dollar had sold off quite drastically, much like the Euro, and I think some of this might just be simple profit taking heading into the weekend in both the Australian dollar and the Euro for that matter. All things being equal though, we need to see this pair break above the 0.6760 level to really start to pick up momentum.

So right now, it’s intriguing, it’s worth watching, but it isn’t necessarily time to buy at this point. I think this is just simple profit taking, maybe a little bit of a dead cat bounce. I would be more likely to short this pair on signs of exhaustion, especially near the 50 day EMA, than I would be to buy it at least at this moment.