EUR/USD, USD/JPY and AUD/USD Weekly Forecast – US Dollar Still Looks Strong During Holiday Week

EUR/USD Technical Analysis

The euro initially did dip a bit during the trading week, but it has turned around to show some signs of life and because of this, I think you’ve got a situation where we might get a little bit of a bounce, but really, I think we’re just consolidating between the 1.03 level on the bottom and the 1.06 level above.

This is a market that I think continues to see a lot of questions asked of it as the ECB is likely to continue to cut rates while the Americans may not be able to. So, with all of that being said, I think you have to understand that rallies will more likely be sold into at the first signs of exhaustion.

USD/JPY Technical Analysis

The US dollar continues to climb against the Japanese yen and therefore, I do think it’s probably only a matter of time before we break above the 158 yen level. Breaking above that I think will open up the possibility of a move to the all-time highs, and I do think it’s probably only a matter of time.

That being said, expect some headwinds. I mean, we’re not going to get there in the blink of an eye, and certainly we are a little extended at the moment, but I do think that dips will continue to offer value.

AUD/USD Technical Analysis

The Australian dollar still can’t get off of its back. The 0.62 level is an area of significant support and if we were to break down below the 0.62 level, then it opens up the bottom and it could send this market down to the 0.60 level. All things being equal, this is a market that given enough time we probably will see a bit of a bounce but that 0.6350 level should end up being a pretty significant barrier, perhaps in the form of a ceiling in the market.

So, I think especially in the case of the Australian dollar, any rally that shows signs of exhaustion will get jumped on by short selling, as people will look to pick up cheap US dollars. Keep in mind that Australia is highly levered to China and that’s part of what’s going on here as well. There are some serious cracks in the Chinese economy.

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