EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Trying to Flex Muscles

EUR/USD Technical Analysis

The euro has been back and forth in the early hours on Wednesday as we continue to hang around the 1.05 level. I suspect we are going to continue to see a lot of back and forth action between now and Friday when we get the non-farm payroll report. The 1.05 level has been significant support multiple times in the past, so it’s not a huge surprise to see it operating as a little bit like a floor in the market right now, but I think once we get those jobs numbers, that will probably give us a little bit more in the way of clarity, so anticipate sideways action.

USD/JPY Technical Analysis

The US dollar has rallied rather significantly against the Japanese yen, as we are now well above the 200 day EMA again. This is a market that I think given enough time very well could really start to take off and that will be especially true as those jobs numbers on Friday are strong. We do get services PMI numbers on Wednesday, but typically that’s not a huge mover of the market but it’s worth noting that the interest rate differential between the United States and Japan remains well over 3% on the 10 year.

So, you get paid to hang on to this currency pair and I think that’s part of what’s starting to come back into the psyche of traders. Furthermore, you can draw a Fibonacci retracement tool from the bottom to the swing high and we just tested the 50% Fibonacci retracement.

AUD/USD Technical Analysis

The Australian dollar has fallen rather hard during the trading session against the US dollar, but that’s not a surprise considering that the quarter over quarter GDP in Australia rose 0.3% instead of the expected 0.5%, showing that perhaps Australia is weakening a bit. Now that we have fallen the way we have and are challenging the 0.64 level. It looks like the market could really start to fall apart and head towards the 0.6350 level and then eventually the 0.6250 level. Short-term rallies, more likely than not, will get sold into.

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