EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Rallies After Chinese and Americans Meet

EUR/USD Technical Analysis

The euro initially did gap lower only to turn around and fill that gap before falling pretty significantly to test the 50 day EMA. This does make a certain amount of sense considering that the United States and China supposedly are getting closer to a trade deal and have agreed to cut back tariffs a bit over the course of the next couple of months while they sort things out.

This had people running back to the dollar as a lot of what we had seen had been people running away from the United States and repatriating dollars into the local currency. At this point, whether or not we continue to go lower remains to be seen, but this certainly looks like an interesting area. We could drop to the 1.0950 level before finding true support, but we’ll just have to wait and see. I’m not a big fan of buying this pair at the moment.

USD/JPY Technical Analysis

The US dollar has skyrocketed against the Japanese yen, although it does seem to be finding a little bit of trouble around the 148 yen level. But nonetheless, remember, people get paid to hold this currency pair. So not only were we forming a bottoming pattern around the 140 yen level, but you were collecting swap along the way. Now that some of the trade tensions seem to be disappearing, it makes perfect sense that this pair would rally.

This pair does tend to rally with risk appetite and risk appetite, according to the stock markets at least, which has gone through the ceiling during the trading session. So, I expect an attempt to get back to the 200 day EMA before it’s all said and done, with the occasional pullback offering buying opportunities.

AUD/USD Technical Analysis

The US dollar has strengthened against the Australian dollar a bit, as the Aussie initially tried to rally in celebration of perhaps Chinese growth due to the trade deal, only to turn around and fall as the US dollar has strengthened against almost everything. At this point, I’m watching the 0.635 zero level because if we break significantly below there, we are going much lower.

On the other hand, if we turn around and take out the 0.65 level to the upside on a daily close, then I think the Aussie has a chance of going all the way to 0.67 followed by 0.69. Remember though, the Australian dollar is highly levered to China, so we’ll have to see how that plays out.

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