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

EUR/USD Technical Analysis

The Euro has rallied a little bit against the US dollar, but we see it stuck with the 1.05 level yet again. There is a massive amount of resistance between 1.05 and 1.06, so you do need to be very cautious, but recognize that this is an area that I think will continue to be extraordinarily important. I would not be a buyer of the market here, but I don’t even necessarily know that I would be a seller. We need some type of clarity and directionality with the euro, with this massive cluster looming overhead.

USD/JPY Technical Analysis

The US dollar has gone back and forth against the Japanese yen, ultimately settling on a little bit of negativity, but nothing major, as we continue to dance around the 150 yen level. If we can break the top of the inverted hammer from the Friday session of last week, then I think you have a real shot at the US dollar taking off to the upside.

But as things stand right now, I think we’re just trying to figure out whether or not this is the bottom. The interest rate differential has shrunk slightly, but at the end of the day you still get paid to hang on to this pair, so I’m not really keen to short it. Quite frankly, if I want to short the US dollar, I would rather do it somewhere where the swap doesn’t kill me over the long term.

AUD/USD Technical Analysis

The Australian dollar has drifted a little bit lower during the trading session, but we have seen it bounce a bit from the 50-day EMA. If the 50-day EMA does in fact hold, then I think you’ve got a real shot at this market going to the 0.64 level where it had recently visited. Anything above changes the landscape completely, but until we do that, I have to assume that we’re still in a form of consolidation, bordered by that 0.64 level on the top and the 50-day EMA on the bottom.

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