EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Continues to Cause Issues for Other Currencies

EUR/USD Technical Analysis

The euro initially did try to rally a bit during the early hours on Friday, but it looks like the 1.12 level will continue to be an area of potential trouble. And really at this point in time, I think we have a situation where the overhead resistance is really starting to weigh on the euro overall and the US dollar after being so oversold. It looks like it’s starting to flex its muscles again. If this market starts to drop, the 50-day EMA comes into the picture as potential support. If we break below there, then the 1.0950 level could be targeted.

USD/JPY Technical Analysis

The US dollar has bounced quite nicely during the trading session on Friday after testing the 145 yen level and then rallied enough to form a bit of a hammer by the time the Americans came on board. If we can break above the 50-day EMA, then I think the US dollar really starts to take off to the upside and continues its recovery against the Japanese yen.

Remember, the interest rate differential is hugely in favor of the Americans, and that’s especially true as we’ve seen the bond market sell off in America. So, it’s not even just a central bank policy. It’s a fact that there is expected inflation as far as the United States is concerned while Japan continues to limp along.

AUD/USD Technical Analysis

The Australian dollar initially did try to rally, but it looks like it’s giving up its gains as well. But we’re right here at the 200 day EMA in a very well defined trading range, so it’s difficult to get overly aggressive. If we can close on a daily chart below the 0.6350 level, then I’m probably going to start shorting. But until then, this is a market that unless you’re scalping back and forth really doesn’t offer a lot. But I would also say you have to keep in mind that if we turn around and break above the 0.65 level, the Aussie could take off to the 0.67 level.

For a look at all of today’s economic events, check out our economic calendar.