EUR/USD, USD/CAD and USD/JPY Forecasts – US Dollar on the Move

EUR/USD Technical Analysis

The euro remains a little elevated after that gap higher on Monday as traders are just simply sitting on their hands I believe at the moment trying to figure out what to do next. We have a couple of important or at least typically important announcements this week. They are not on Tuesday. So, I think Tuesday could be fairly quiet.

Wednesday is going to get a speech by both a European Central Banker and an American one, but it’s Thursday where we get the Core PCE Price Index. That is the Federal Reserve’s favorite inflation gauge. That could move the market.

Unfortunately, though, I think really what we’re looking at here is a market that’s just trying to figure out what to do with itself because of the situation in the Middle East, which is clear as mud at the moment. We are basically in the middle of the larger consolidation area between 1.14 and 1.1850. So, it makes sense that we just sit here and tread water.

USD/CAD Technical Analysis

The US dollar is rallying against the Canadian dollar, and I think that makes a certain amount of sense considering there are a lot of ugly reports coming out of Canada as far as the economy is concerned. And we may just simply be going to the top of the overall range. That would be 1.3950 or so.

This is a pair that isn’t that exciting most of the time, but if you look at the candlesticks for the month of May, almost all of them are green. Yes, there are a lot of wicks, but almost all of them are green. This is a simple continuation of what we’ve seen. I think short-term pullbacks continue to offer buying opportunities, especially near the 200-day EMA.

USD/JPY Technical Analysis

The US dollar rallied a bit against the Japanese yen during the trading session on Tuesday as well. And the market looks as if it’s trying to find its way to the 160-yen level above and is certainly going to be an area that I think a lot of people are watching. It’s where the Bank of Japan gets really nervous and one would have to think that they’re watching the market yet again.

That being said, the interest rate differential still favors the US quite drastically and I think that continues to put upward pressure here. Short-term pullbacks are buying opportunities. I’m not looking for major moves, at least not at the moment, but if we do break above the 160.50-yen level, that breaks above a swing high going back to 1990.

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