EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar a Bit Soft Early on Tuesday

EUR/USD Technical Analysis

The Euro has rallied initially against the U.S. dollar, but it does look like it’s still struggling a bit to really hang on to gains. So, I find this interesting. At this point, we’re still in an uptrend, so you can’t necessarily get aggressively short, but I am watching the 50-day EMA and the trend line because if we break both of those, then we will test the 1.16 level. Anything below that probably changes the entire attitude.

To the upside, the 1.18 level continues to be resistance, so we’ll see if we can get above there, but it’s not exactly an explosive market at the moment, despite the fact that everybody is betting on the Federal Reserve cutting rates a couple more times.

USD/JPY Technical Analysis

The US dollar has fallen after initially trying to recover against the Japanese yen. It is sitting on top of the 200-day EMA, so we’ll see if that holds. It could end up being a buying opportunity. A move above the 149 yen level would be confirmation that there are plenty of buyers here, but we’ll just have to wait and see how that plays out.

A breakdown below the 50-day EMA opens up a move back down to the 146-yen level. I do think choppiness is the order of the day, but really at this point in time, the Japanese yen, despite the fact that it has recovered the last couple of days, is not a currency I want to own.

AUD/USD Technical Analysis

The Australian dollar has broken higher again and now finds itself above the 0.66 level, perhaps making its way towards the 0.67 level over time. This is an interesting market because it has underperformed most of its colleagues against the US dollar. But at this point, maybe it’s finally starting to get a little bit more sustainable in its move higher. It is worth noting that the Australians kept their interest rate at the same level in the early hours of the day. So maybe that’s part of what it is. They just aren’t cutting as they stay at 3.6%.

All things being equal though, I am a little bit leery of getting aggressive until we can clear the top of the candlestick from last Wednesday, which isn’t too far away. It’s somewhere right around 0.6630. I think above there, then you have a little bit more confirmation. Otherwise, we may spend some time consolidating in this general vicinity.

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