EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Falls in Early Friday Trading

EUR/USD Technical Analysis

The euro rallied just a bit in the early hours on Friday as the 1.05 level continues to show signs of support. Ultimately, the market is bouncing from an extreme oversold condition. So, I don’t think any of this is a surprise. If we break above the 1.06 level, then the market could very well go to the 1.0750 level.

On the other hand, if we break down below the 1.05 level, then at the end of the day, it really doesn’t make much sense that we would see anything but US dollar strength across the board. It would not just be in the Euro, but it would be in pretty much every currency on Earth. Right now, though, this looks like a recovery rally.

USD/JPY Technical Analysis

The US dollar has pulled back just a bit against the Japanese yen during the trading session to test the 155 yen level, an area that had been significant resistance previously, all things being equal. This is a market that has been a little overdone and now is going to work off some of this froth. It’s very much like you see in the euro, but the interest rate differential alone will keep this pair positive.

AUD/USD Technical Analysis

The Australian dollar has rallied a bit, but we are at extremely low levels for the last couple of years, so why wouldn’t it? The 0.65 level could offer a bit of resistance, but if we break above there, then the 0.66 level comes into the picture. We are just now getting the so-called death cross when the 50-day EMA breaks down below the 200-day EMA. Although, I’m the first person to admit that the death cross and the golden cross, both tend to be extraordinarily late signals, so I don’t know that I read too much into it.

Other than there will be people taking that into account in the back of their collective minds when placing trades in this market. Ultimately, I think this is going to be much like the euro, where it’s just a recovery rally for the short term. I don’t think anything has changed for a bigger move.

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