EUR/USD, USD/JPY and AUD/USD Weekly Forecast – US Dollar Has a Massive Week Again

EUR/USD Technical Analysis

The Euro has broken down significantly during the course of the week, and especially on Friday, as we have seen the PMI numbers in the European Union, Germany, France, and peripherally the United Kingdom tank. So therefore, it looks to me like we have broken through a major support level over the last couple of years and it looks like we are very possibly going to be heading toward the parity level.

With this being said, I do think that there will be the occasional bounce, but that bounce will get sold into, and therefore, I think it’s probably time to look at this as a short only market again, as we have now broken through this two year range. Parity is a very real possibility.

USD/JPY Technical Analysis

The US dollar has gone back and forth during the course of the week against the Japanese yen as we continue to hang around the 155 yen level. Ultimately, if we can break above here, it opens up a move to the 160 yen level. On the daily chart, you can see it’s just been a chop fest. So, I think the weekly neutral candlestick is something that explains a lot. Really short-term pullbacks offer buying opportunities for those willing to take advantage of the interest rate differential.

AUD/USD Technical Analysis

And in the Australian dollar, we have had a little bit of a rally to recapture the 0.65 level, but this is a little bit of an outlier, and I suspect that if the US dollar keeps strengthening against everything else, it’s probably only a matter of time for the Australian dollar gives away as well.

The Reserve Bank of Australia has recently kept rates flat, and that’s part of what we are seeing here is a little bit of resiliency by the Aussie dollar. Nonetheless, if interest rates in America continue to climb, and of course we have so many geopolitical issues, it’s hard to imagine that the US dollar will lose too much ground to the Australian dollar.

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