EUR/USD, USD/CAD and USD/JPY Forecasts – US Dollar Fighting Back on Tuesday

EUR/USD Technical Analysis

The Euro has dropped a little bit lower during the trading session here on Tuesday as we are breaking below the 1.14 level. The 1.14 level is an area that, of course, has been important a couple of times recently as it was support. Now that we are trying to break down below there, it’s possible that we could go looking to the 1.1320 level.

Rallies at this point in time, I think, are still selling opportunities in a market that will continue to be noisy in general. And of course, with US rates starting to turn higher during the day, that puts more downward pressure here as well.

USD/CAD Technical Analysis

The US dollar, of course, is rallying against the Canadian dollar, with the 1.42 level offering a little bit of support and the 1.4250 level being a little bit of resistance. This is a strong uptrend for multiple reasons, not the least of which would be the fact that oil had sold off, but more importantly, in this pair, the interest rate differential favors the United States, not to mention the fact that the Federal Reserve is likely to raise rates a couple of times between now and the end of the year.

The 1.43 level will be targeted. After that, we could be talking about 1.45.

USD/JPY Technical Analysis

The United States dollar continues to punish the Japanese yen, and it looks like we are probably going to continue to go much higher. We had recently broken above a 1986 high, and now we’re free and clear. I think given enough time, the US dollar goes looking to much higher levels, possibly 224 yen based on the rounding bottom and the pattern that is now broken.

Any intervention by the Bank of Japan at this point in time will only end up being a buying opportunity. I think the 160-yen region, right where the 50-day EMA is, will be your floor.

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