EUR/USD, GBP/USD and USD/JPY Forecasts – US Dollar Jumps on Risk Aversion

EUR/USD Technical Analysis

US dollar jumps immediately at the open on Monday as Islamabad produces nothing. The Euro has fallen against the US dollar early on Monday as the risk appetite of traders has been damaged by the lack of agreement in Islamabad between the Americans and the Iranians.

That being said, it does look like we are trying to turn things around and we are near the 1.17 level, an area that of course has been important multiple times. So, we will have to see how this plays out. If we can continue the upside momentum from here, the 1.18 level then becomes your target.

Short-term pullbacks at this point in time end up being probably supported by the 50-day EMA and almost certainly supported by the 1.16 level.

GBP/USD Technical Analysis

The British pound also gapped lower against the US dollar as interest rates in America jumped in a risk-off type of move.

All things being equal, this is a market that I think continues to see a lot of volatility and a lot of noise. I do not have any real interest in trying to get creative here. I am just watching the 1.35 level to see whether or not we can break above it. If we cannot and we show signs of exhaustion, it could be a nice shorting opportunity because it would just mean we are in the same range. Anything above 1.35 on a daily close, that gets interesting to the long side.

USD/JPY Technical Analysis

The US dollar has jumped against the Japanese yen yet again during the trading session here on Monday as we are threatening the 160-yen level. I do believe it is probably only a matter of time before we do breakout, and this breakout is going to be a big deal.

It will have traders looking at the market through the prism of a breakout that goes all the way back to 1990. This could lead to a multi-year move. In the short term, though, it is probably more likely than not that we would see a little bit of a pullback. That pullback for me opens up a lot of value, especially if we see a drop and a bounce near the 158-yen level.

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