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

EUR/USD Technical Analysis

The Euro has pulled back just a bit against the US dollar during early trading on Friday as PMI numbers have come out of multiple jurisdictions around the world and it shows pretty much what you expected it to be pretty messy. That being said, I think we’ve got a situation where we are running into a significant amount of resistance, and the 1.05 level has been like a major barrier to overcome.

Ultimately, this is a market that I think given enough time probably pulls back a bit and goes looking to the 50 day EMA. The 50-day EMA, of course, is a commonly followed technical indicator that a lot of people pay close attention to. And therefore, I think you have to look at this through the prism of a scenario where we have to see whether or not 1.04 holds. If it does, then the uptrend is intact. If not, then possibly break back towards the 1.02 level.

USD/JPY Technical Analysis

The US dollar initially shot higher during the trading session on Friday but then gave back gains to show signs of hesitation. By doing so, it looks like it’s trying to form a little bit of an inverted hammer, and this does make a certain amount of sense considering that the market has continued to be fascinated by the idea that the Bank of Japan might possibly tighten rates a couple of times.

If that’s the case, then we could continue to see a little bit of downward pressure, although I’ll be the first to tell you that I believe that is going to be turned around in the long term. As things stand right now though, it is very difficult to buy the dollar against the yen despite the fact the interest rate differential works in your favor.

AUD/USD Technical Analysis

The Australian dollar is struggling a bit, as you can see, with the market pulling back a little bit during the trading session on Friday, I think it’s probably reaching a point where we have to question whether or not the upward momentum can continue. If we break below the bottom of the Thursday candlestick, I think that would be an extraordinarily negative turn of events and we could see the US dollar really start to strengthen against the Aussie.

The tit for tat tariffs coming out of China certainly come into play here as well. So, we’ll have to wait and see, but clearly at this point in time we are still very much in a downturn despite the fact that we’ve had a nice bounce.

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