AUD/USD, NZD/USD and USD/JPY Forecast – Asian Currencies Pressure US Dollar

AUD/USD Technical Analysis

The US dollar remains soft. This is a market that is overbought, but clearly, it has picked a direction. In the case of the Australian dollar, the move actually makes sense. We have a Federal Reserve that is likely to cut rates a couple of times in 2026 while the Reserve Bank of Australia probably needs to raise rates.

This is a classic interest rate differential kind of rebalancing trade. The Chinese manufacturing sector is picking up a bit, and that means Australia will have more demand for its raw materials.

One place that I am looking at for a potential buy on the dip play is the 0.69 level. I think any pullback at this point in time probably gets people interested in owning the Aussie again. Clearly, this is an explosive move.

NZD/USD Technical Analysis

You can say the same thing about the New Zealand dollar, but this is a little bit different situation inasmuch as it is possible they will be cutting rates in New Zealand. That has been hinted at, and therefore, if one of these were to fall against the US dollar, it would probably be the New Zealand dollar first. In fact, you might even trade the Aussie long against the Kiwi dollar in that pair.

At this point in time, we are approaching the 0.61 level, which is the top of this range. I am watching to see if this thing starts falling. If it does, I actually don’t mind shorting this pair. If you buy the Australian dollar against the US dollar and you sell the New Zealand dollar against the US dollar, you are essentially long Aussie/Kiwi.

USD/JPY Technical Analysis

The US dollar continues to try to do everything it can to bounce against the Japanese yen. I do think it eventually does. The interest rate play here is just too juicy for traders to ignore, but I think we are still in a consolidation pattern just above the crucial 200-day EMA. It is not that I wouldn’t buy it here, but I think you have time. If we recapture 154 yen, I might start getting long there. If we break down below the 200-day EMA, that would be a sell signal for the dollar again, but there are other currencies that you could sell the dollar against and probably get better movement anyway.

If you’d like to know more about how interest rates drive currency moves, please visit our educational area.