EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar a Little Soft in Early Trading

EUR/USD Technical Analysis

The euro has been back and forth for the last several days and of course, Tuesday doesn’t look any different. This is not a huge surprise considering that the FOMC meeting is on Wednesday and I think a lot of traders are just simply trying to sort out where we go next as far as monetary policy in the United States. That obviously would be a very big factor.

As a result, I think you have to keep in mind that with this confusion, with this hesitation, you have a scenario where the market probably goes back and forth. We currently see the 1.13 level as significant short-term support with the 1.15 level above as resistance. I think we will stay in this range over the next 24 hours, at least until we get the results of the FOMC.

USD/JPY Technical Analysis

The dollar has fallen pretty significantly against the Japanese yen and clearly it looks like people are looking for a little bit of safety here. At this point, I still think we’re in the process of trying to do something about the whole idea of whether or not the Bank of Japan will be able to tighten their monetary policy, which I don’t think they’re going to. They somewhat blinked.

Furthermore, the US dollar in the FOMC will have a major say during the session on Wednesday. The interest rate differential still favors the dollar. And if they sound more hawkish than dovish, that could very well have an effect on this pair as well, sending it higher. I think the next 24 hours though, we sat sideways.

AUD/USD Technical Analysis

The Australian dollar continues to hover at very high levels, but I think we’ve got a situation where you have to look at this through the prism of a potential breakout. But again, I think we have to get through the FOMC before we can truly believe that a break above the 0.65 level opens up a much bigger move. Short term pullbacks, I think, see significant support at the 50 day EMA.

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