EUR/USD, USD/JPY, AUD/USD Weekly Price Outlook – US Dollar Gives Back Strength this Week

EUR/USD Technical Analysis

The euro has rallied just a bit during the early part of the week pulled back and then rallied again on Friday. All things being equal, this is a market that I think will continue to see a lot of chop and of course support near the 1.0850 level. The market rallying does make a certain amount of sense due to the fact that we have been in a range for about two years in the same general vicinity, so I think this is just more sideways noise than anything else.

If we were to break down below the 1.0750 level, then it could open up a bit. That being said, I think this is a market that probably has a little bit more in the way of upside to it, but probably not a lot.

USD/JPY Technical Analysis

The US dollar initially rallied against the Japanese yen and then fell as we got the Bank of Japan interest rate decision and the jobs number in America, but it does look like we will probably continue to see buyers on dips. I have no interest in shorting this pair and I do think that given enough time it goes higher because quite frankly the carry trade is back in full force.

However, after the jobs number some people are starting to call for 25 basis points rate cut coming out of the Fed at the next meeting so that might have some bearing but nonetheless you still get paid to hang on to this pair at the end of every day and I have been doing so for a while and quite frankly there’s no real reason for me to change my overall attitude, I think we remain bullish but volatile.

AUD/USD Technical Analysis

The Australian dollar plummeted towards the 0.6550 level only to turn around and show signs of life. By doing so, it is forming a candlestick that is starting to look more and more like a hammer and perhaps a sign that we are ready to bounce. This wouldn’t surprise me too much because, quite frankly, the market had been so oversold over the last five weeks. So, a little bit of a bounce does make a certain amount of sense.

The question of course is whether or not we can sustain any of the gains from the bounce. I think it will be somewhat limited and I would be very interested in seeing what happens near the 0.67 level because I think that could be rather significant resistance.