EUR/USD, USD/JPY and AUD/USD Price Outlook – US Dollar Continues to Hold Gains

EUR/USD Technical Analysis

The Euro dropped a bit during the early hours on Tuesday to break down below the 1.03 level, only to turn around and show signs of life again. By doing so, the market just confirms the fact that we are hanging around this significant support level, and I think we’re still trying to figure out what to do with ourselves.

We don’t really have a whole lot of direction at the moment, but we have the ISM services PMI number coming out on Wednesday, as well as the ADP non-farm, which is the private version. So that could be a mover, but really at this point in time, it looks to me a lot like a market that any rally that you see, you probably will see plenty of sellers above, especially if we get anywhere near 1.05.

USD/JPY Technical Analysis

The US dollar continues to grind back to the upside against the Japanese yen. Interest rate differential play here is the argument for buying this pair. Really, at this point in time, I just think we will continue to see a lot of choppy volatility. This will be especially true as Donald Trump has already shown that he’s on the war path. And that means that there will be tariffs for pretty much everybody. At this point in time, I think we’ve got a scenario where you’re still buying dips, though. The interest rate differential continues to get you paid.

AUD/USD Technical Analysis

Here in the Australian dollar, we are just hanging around the same area, the 0.62 level that we had been for a while. This is very reminiscent of the Euro chart and it’s essentially the same argument. It’s all about the US dollar, not so much about the Aussie. The Australian dollar, of course, is tied to the Chinese economy, which just got another 10% in tariffs levied against it.

But more importantly, the dominus loophole has been taken out of shipping. There was a point in time until just a few days ago, Chinese goods under the value of $800 did not pay tariffs. That’s no longer a thing. So that will also have an influence on some of the Chinese companies that have popped up in competition directly with Amazon.