US Dollar Mixed as We Wait for FOMC – EUR/USD, USD/JPY, and AUD/USD Technical Analysis

EUR/USD Technical Analysis

The euro has gone back and forth during the early hours on Wednesday, which is not a huge surprise as we are waiting on the FOMC interest rate decision and of course, the press conference statement, etc. This of course, will have a major influence on what happens with the US dollar. The Fed funds futures rate market suggests that the month of January will probably see a Federal Reserve standing still.

So, this could be a one and done type of situation. If it is, it will more likely than not ultimately be positive for the US dollar. However, it is setting up for the potential of a short term bounce. That short term bounce at the first signs of exhaustion, I have no issue with shorting it.

USD/JPY Technical Analysis

The US dollar has rallied slightly against the Japanese yen. I would expect to see a lot of volatility over the next 24 hours, as we not only have the Federal Reserve, but we have the Bank of Japan speaking as well, with their interest rate decision and press conference and statement.

I favor the upside. I would love to see a little bit of a pullback to take advantage of, and I do recognize that if we can break above 155 yen, we probably go looking to the 156.50 yen level. Short-term pullbacks all the way down to the 150 yen level to me are going to end up being buying opportunities.

AUD/USD Technical Analysis

The Australian dollar has fallen yet again overnight, and quite frankly, this currency looks horrible. And although we are at an area where a lot of retail traders will want to jump in, because it’s been obvious support. And while you can make that argument, the reality is that Australia has a big problem, and that big problem is China. So as long as it looks like there are economic concerns in China, Australia is going to struggle.

Now, I do think that we probably get a bounce from here. That bounce, much like the euro, is going to be something I’ll be looking for signs of exhaustion to start selling. I’d be particularly interested in a nice bounce towards the 0.65 level that fails, but quite frankly, that’s kind of been the hope here for about 10 days and we only managed to get that high once.

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