EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Attempts to Recover Early on Monday

EUR/USD Technical Analysis

The euro initially rallied a bit after gapping lower on Monday but then found trouble above the 1.05 level. By doing so, the market looks as if we are going to respect the overall consolidation that we have been in. And it’s probably worth noting that the stochastic oscillator has crossed in overbought condition. So, it is another reason to believe that maybe we drift lower from here.

Ultimately, I do think this is a market that the downtrend is not over with. And I also believe that there are plenty of reasons to think that the euro is not the solution to your anti-dollar bias. If we do rally from here, it’s really not until we get through the cluster, which ends at 1.06 that I would consider buying with any significant size.

USD/JPY Technical Analysis

The US dollar has rallied a bit against the Japanese and during early trading on Monday, but this is one that has been a little bit difficult. Mainly because everybody is celebrating the idea that there might be interest rates offered in Japan. Nonetheless, we’re still looking at 0.75% by the end of the year, so… The interest rate differential will still favor the dollar for the foreseeable future.

It does shrink, the interest rate differential that is, but at the end of the day, I suspect it’s probably only a matter of time before we rally. That being said, I don’t see anything here yet that gets me buying and I certainly wouldn’t chase the sell order here. At this point, we would have to break through the 148 yen level to kick off the next leg down to 145 yen.

AUD/USD Technical Analysis

The Australian dollar looks like it tried to rally a bit, but it gave up its gains as well. I’ll be watching this one specifically because of the 50 day EMA sitting just below. potentially kicking off another sell signal and then an opportunity to get short of the Australian dollar again Australia of course is highly levered to China Which has a whole plethora of its own issues And of course the Australian economy is highly driven by Commodities and if global trade is going to start slowing down that also has a major effect here as well.

So, with that, I am looking for an opportunity to get short below the 50-day EMA, but we’ll have to wait and see whether or not I get that set up.

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