EUR/USD, GBP/USD and AUD/USD Forecast – US Dollar Continues to Pressure Others

EUR/USD Technical Analysis

The Euro has fallen again during early trading on Friday as we continue to dance around the 200-day EMA and are continuing to dig it away at a pretty significant support zone from 1.16 down to the 1.15 level. If we were to break down below the 1.15 level, then I think the market opens up a move down to the 1.11 handle.

A rally from here certainly is possible but I think most of what we’re seeing here is questions about what the ECB is going to have to do about rising energy prices in order to stimulate the economy while the Federal Reserve is likely to still be a little bit on the sidelines at the moment despite the fact that everybody is screaming for interest rate cuts.

GBP/USD Technical Analysis

The British Pound is very similar; it’s dancing around the 200-day EMA, but in this case, the support level below is the 1.3250 level. If we were to break down below there, it could open up a drop to the 1.30 level.

Rallies at this point in time are not to be trusted. I do think that the US Dollar is strengthening for a multitude of reasons, and of course, the British have almost cut the last meeting. One would think that they almost certainly will be pushed over the edge with the price of energy going so much higher. So, I believe that this remains a “fade the rally” market as well, with a ceiling at the 1.35 level.

AUD/USD Technical Analysis

The Australian Dollar continues to be an interesting situation because the Reserve Bank of Australia recently raised rates, and they are expected to do so later this year as well, while the Federal Reserve is expected to cut. It has been stubborn and one thing that I cannot help but notice is that while we’re in this consolidation, the Australian Dollar just doesn’t have a lot of momentum to break above the 0.7150 level.

Maybe we’re running out of steam. I am pretty neutral on this pair at the moment, although if I had to pick a direction, it’s probably higher, but a breakdown below the 0.69 level could change everything and get things very bearish very quickly. So, this is one that’s probably better left observed, maybe giving you a clue as to what the Dollar will do against other currencies.