EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Loosening Its Grip?

EUR/USD Technical Analysis

The Euro rallied just a bit during the trading session on Thursday as we tried to break above the 1.08 level. Whether or not we can stick above there, then continue higher is the question. And right now, I think basically what we are waiting for is how the PMI numbers sort themselves out around the world. The United States will have flash manufacturing and flash services PMI numbers later in the day.

And for what it is worth, the European numbers were a little better than anticipated, so that might be part of the bounce that we see. I do think that rallies are probably going to be sold into, though.

USD/JPY Technical Analysis

The US dollar has pulled back just a bit against the Japanese yen to hang around the 152 yen level. This makes sense. We’ve broken above there. We need to come back and test for support. If those PMI numbers in the later part of the session come out better than expected, then I would anticipate that the US dollar rallies from here. Regardless, I would also anticipate that at the 150 yen level, there should be massive support. This was a major breakout, and now we are just simply waiting to see when buyers come in to pick up value, which could be pushed along by either the bond market or the PMI announcements.

AUD/USD Technical Analysis

The Australian dollar has rallied enough to reach the 200 day EMA against the US dollar, which is just above the 0.6650 level, but has given back some of those gains. All things being equal, this is a market that continues to see a lot of back and forth and choppiness in this area. So really at this point, what I think we’re looking at is a market that’s trying to form some type of facing pattern.

The Australian dollar of course is very sensitive to Asia and precious metals as well as global growth most of the time, but the correlation between gold and the Australian dollar has broken down as of late, so it’s not a 100% correlation. That being said, if we can break above the 0.67 level, then that might give us enough momentum to start rallying. Otherwise, if we break down below the 0.66 level, we probably drop another 200 pips before it’s all said and done in what would probably be a pro-US dollar environment across the board anyway.