EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Continues to Look Strong Against Almost Everything

EUR/USD Technical Analysis

The euro has plunged during early trading, reaching as low as 1.0330 or so as the PMI numbers in Germany, France, the EU, and even peripherally, the United Kingdom all came in lower than anticipated. By doing so, it looks to me as if the market will continue to see a lot of reasons to question the European growth situation out therea, and that of course will favor the US dollar.

This is especially true as the US bond markets continue to cause higher interest rates. So therefore, the market is likely to continue to see a lot of volatility. But I think now that we are below the support of the last couple of years, I do think that it becomes a fade the rally type market even more fading, and it’s possible that the Euro drops down to parity.

USD/JPY Technical Analysis

The US dollar has gone back and forth against the Japanese yen during the trading session on Friday, but the 155 yen level continues to be an area that people are paying close attention to. If we can break out to the upside and clear the 157 yen level, then the market could go much higher. Short term pullbacks I think continue to be buying opportunities and therefore you have to look at this through the prism of the interest rate differential, which at this point is probably only going to climb.

AUD/USD Technical Analysis

The Australian dollar has fallen a bit during the early hours on Friday but turned around to show signs of life again as market participants continued to pay close to the 0.65 level. The 0.65 level, of course, is an area that’s been important multiple times, and it is a large round psychologically significant figure that will continue to attract attention.

If we break down through the 0.64 level, though, the bottom falls apart and we go much lower. Short-term rallies at this point in time should end up being buying opportunities as traders look for value in the greenback. At this point, I just don’t have any interest in trying to fight the US dollar strength.

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