EUR/USD, EUR/JPY and AUD/USD Brace for Jackson Hole Volatility

EUR/USD Technical Analysis

The euro has been drifting a bit during the early part of trading on Friday, which makes sense. We’re waiting on a speech out of Jackson Hole from Kevin Warsh, which could give us an idea as to what the Federal Reserve policy is going to be.

And we have settled right around 1.1650. I think it’s pretty straightforward. We need to see how the market reacts to a speech in a few hours to determine which direction we are going to go. The euro does look a little tired on the daily chart, so that and the interest rate differential, unless of course he comes straight out and talks about being dovish, has me favoring the US dollar still. It’s been a little bit of a tough market for the US dollar recently, but when we look at the big scheme of things, a pullback to the 1.1580 level would not be the craziest outcome. If he sounds dovish, then 1.17 will be my target to the upside.

EUR/JPY Technical Analysis

The euro against the yen is dropping a bit. The 185.65 level is an area that I’ll be watching here on the hourly chart. We’ll have to see how that plays out. I still don’t like the Japanese yen regardless of what comes out of Jackson Hole, unless for some reason there’s a coordinated statement about the Japanese yen, which I don’t necessarily expect here. So I’m looking to buy dips in several currencies against the yen, but the euro is one of them. That would be particularly true if it starts to rally against the US dollar.

AUD/USD Technical Analysis

And finally, the Australian dollar finds itself hanging around the 0.72 level. The market has risen about 50 pips over the last several days, so clearly waiting on something. Unless we see some type of huge US dollar rally, I look at pullbacks as potential buying opportunities with the 0.7175 level being a potential buying opportunity, and then again at the 0.7150 level. If we just rally from here, if we can clear the 0.72 level by a good 20 pips or so, I might be a buyer there as well.

If you’d like to know more about how to trade forex, please visit our educational area.