EUR/USD, USD/CAD and AUD/USD Forecasts – US Dollar Firming on Higher Rates

EUR/USD Technical Analysis

The Euro initially tried to rally on Tuesday, but you can see that we are starting to fail again at the 200-day EMA. This suggests that the market is going to continue to see a lot of hesitation. I think a lot of concern when it comes to breaking out to the upside, mainly due to the fact that there is so much in question of where risk appetite is going to go as traders are watching the 10-year yield in America rally as the explosions heard in Iran suggest that maybe the infrastructure attack has started.

If that’s the case, Europe’s going to find getting energy quite a bit more difficult, perhaps longer term. Ultimately, though, we are still very much in a consolidation range and we’re basically in the middle of it. I prefer to fade rallies here more than anything else.

USD/CAD Technical Analysis

The US dollar is a little bit positive against the Canadian dollar as the market continues to consolidate in the same general vicinity as it has for the last week or so. But I think you also have to understand that even if we break out from here, the 1.40 level will continue to be a massive psychological barrier.

Short-term pullbacks could perhaps be ready to be seen. I think the 200-day EMA could be your floor if we do see that, and a drop and a bounce like that I think opens up the possibility of a “buy on the dip” type of scenario.

AUD/USD Technical Analysis

The Australian dollar tried to rally a bit during the trading session, but it continues to see a lot of trouble near the 0.6950 level and therefore I think you will see a continuation of the hesitation. Signs of exhaustion get sold into and it’s not until we break above the 0.70 level that I would be convinced that the Australian dollar can take off to the upside.

Again, this is an interest rate situation and fear. It could end up getting down to the 200-day EMA; that would be my target if I was short, but I recognize there will be a lot of choppiness here.

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