US Dollar Gives Up Early Gains – EUR/USD USD/JPY and AUD/USD Technical Analysis

EUR/USD Technical Analysis

The Euro has rallied a bit during the early hours on Friday to show signs of life as the 1.03 level below seems to be support, but really at this point in time, I think you’ve got a situation where the 1.05 level will be a significant resistance barrier extending all the way to the 1.06 level. Really, it’s not until we break above the 1.06 level that I think anything has truly changed, with the Federal Reserve likely to be tight going into 2025 or at least tighter than anticipated while the ECB is going to have to loosen, I think we continue to see fade the rally here.

USD/JPY Technical Analysis

The US dollar initially rallied against the Japanese yen overnight but has given back a little bit of those gains. That’s not really a huge surprise when you look at the last couple of weeks. We’ve basically gone somewhat parabolic gaining 6.23%, before the pullback earlier in the session, which is a reasonably big move for a currency pair. That being said, the interest rate differential still favors the United States dollar, so I think this pullback ends up being a buying opportunity as people will be more than willing to collect that swap at the end of the day.

AUD/USD Technical Analysis

The Australian dollar has gone back and forth during the early hours as it continues to try to find its bottom. I still believe that the 0.6350 level above is going to be a massive barrier that’s difficult to take out. So, I look at any rally towards that area as a potential selling opportunity.

If the market were to break above there, then that could change some things. But right now, I think we’ve got a scenario where traders are just simply hanging out and waiting to see if they can pick up cheap US dollars. I would not be a buyer of the Aussie dollar at this point, even if you told me for a fact that it was going to rally during the session because the Aussie is so weak, and of course is tied to China, which has a whole slew of issues.

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