EUR/USD Technical Analysis
The Euro has bounced a bit from the 50-day EMA against the US dollar as interest rates in America actually rose early. They are starting to roll over now and that’s part of what’s going on, but I think this tells us that there might be a little bit more risk appetite out there than we thought.
This is a scenario that traders will have to keep an eye on. In general, we have seen a lot of correlation between rates and the dollar, but that seems to be breaking a little bit earlier on Friday. We’ll see if that continues to be the case. A bounce from here could go looking to the 1.18 level.
GBP/USD Technical Analysis
The British pound finds itself recovering as we are at the 1.35 level again. This is a market that has been a bit more positive in general over the last year and a half or so than many others against the US dollar. So, not a surprise if we’re seeing the Euro bounce that we’re seeing the pound bounce.
I still see a lot of noise just above though, and I think that even if we were to see this market rally from here to the 1.36 level, I don’t think it’s going to be easy. I don’t necessarily want to short this market, at least not yet, but signs of exhaustion could have me interested.
USD/JPY Technical Analysis
EUR/USD Price Forecast
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See all EUR/USD forecastsThe US dollar has pulled back against the Japanese yen, but quite frankly, that’s not a huge surprise. The 160-yen level continues to be defended quite drastically. If we can break above there, then the 160.40-yen level might be targeted. A drop from here could open up a move down to the 50-day EMA or perhaps even the 158-yen level, an area that’s been like a hard floor.
Interest rate differential is still wide enough to drive a truck through, so if this pulls back, it’s yet another buy on the dip opportunity. If we can clear the 160.40-yen level, that opens up a massive move because that’s a swing high from 1990.
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