EUR/USD, GBP/USD and AUD/USD Forecasts – US Dollar Remains Bullish on Friday

EUR/USD Technical Analysis

The Euro has drifted a little bit lower during the trading session despite the fact that the US interest rates have dropped. That’s interesting, and it looks like we are going to continue to be somewhat soft, I think, when it comes to the Euro. This does make a certain amount of sense—there is an interest rate differential—but I think more importantly, there’s a lot of concerns about European energy supply later this year. And if they continue to have potential issues because of the situation in the Middle East, we could see a return to the 1.14 level. It’ll be more of a grind, but we could get there. Short-term rallies at this point, for me at least, look like selling opportunities at the first signs of exhaustion.

GBP/USD Technical Analysis

The British pound was down ever so slightly on Friday. This, I think, is more a story of markets being just exhausted, and I think going into the weekend, a lot of traders don’t really know what to do. The British pound is somewhat insulated in the sense that the rates in the UK are slightly higher, and at this point, from a technical analysis standpoint, we are sitting just above the 200-day EMA and just below the 50-day EMA. In other words, an area that you would expect to see some interest and compression anyway. Right now, I’m pretty neutral on this market. I think short-term 20 to 30 pip moves back and forth are probably what you can expect.

AUD/USD Technical Analysis

The Australian dollar has fallen as well, reaching toward the 50-day EMA, getting fairly close to an area where there seems to be a certain amount of demand for the Aussie dollar, so I would watch that.

The 50-day EMA has been somewhat reliable over the last week. We’ll see if that remains the case, because if so, it could be a short-term buying opportunity. I don’t have any interest in shorting the Aussie. It’s not even that I don’t like the US dollar, it’s just that the Reserve Bank of Australia has recently raised rates, and that’s something most banks aren’t doing.

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