EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Strengthens as America Bombs Iran

EUR/USD Technical Analysis

The euro has gapped lower, rallied pretty significantly, and then fell again as traders pile into the US dollar after the US strikes on Iran. This is just a continuation of what I’ve been seeing over here. And on the weekly chart, you can really get a look at it. The Euro looks exhausted. So, we’ll have to wait and see, but I do think a pullback is coming, perhaps back down to the 1.13 level.

USD/JPY Technical Analysis

The US dollar has rallied significantly against the Japanese yen and is now threatening the 148 yen level and the 200 day EMA. This is an area that I think might be a little bit difficult to get beyond, at least in the first attempt. But once we got above that 146 yen level, it was always going to be a target. So, with that, I think you have to look at the dollar as likely to test the 200-day EMA, but probably just as likely to pull back a bit in order to attract more buyers. The interest rate differential continues to pay you to hang on to this pair, so that works in your favor as well.

AUD/USD Technical Analysis

The Australian dollar has plummeted during the session after a gapping lower, and it now looks like it’s heading towards 0.6350. If we break down below that level, then I think the Aussie is done. We just had this grinding channel for what seemed like a lifetime and that is now destroyed. The market had fallen pretty significantly back in April with the tariff situation, bounced just as aggressively and then just drifted higher. But I think the death of the dollar was prematurely reported as per usual, and now the markets are starting to correct. I anticipate that we will probably consolidate right around 0.63, maybe 0.6350, but if we break down below that area, the bottom will fall out. As far as buying is concerned, I would need to see the appropriate price action.

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