EUR/USD Technical Analysis
The Euro has basically just dropped from 1.03 during trading on Thursday morning. At this point in time, I think you’ve got a situation where the market is just going to continue to favor the US dollar and I think that’s especially true when you’re talking about the euro. After all the euro is dealing with a lot of economic problems all at the same time and of course the interest rate differential will be wide enough to drive a truck through before this is all said and done.
I do believe that with the various issues in European economies, especially Germany and France, and trouble with energy, which is basically an 18th century problem, you have the likelihood of the US economy outperforming Europe even more so, and therefore, I don’t see any reason why we don’t get to parity.
USD/JPY Technical Analysis
The US dollar has fallen pretty significantly against the Japanese yen but has bounced quite nicely and it shows that the 155 yen level, at least at the moment, is a significant support level and I think you have to look at it as such. With that being the case, I do believe that we eventually try to get back to the top of the range, which means a revisit of the 158 yen level.
This is a market that I think is trying to build up the necessary pressure to break out despite the fact that some people believe that the Japanese will raise rates twice this year, and my retort to that is, so what? The Americans will probably cut rates at least once and that will still leave this massive interest rate differential.
AUD/USD Technical Analysis
The Australian dollar just can’t get out of its own way. It tried to get to the 0.6050 level and just failed miserably. This, as it has been for some time, remains a market that you want to fade short-term rallies and take advantage of cheap dollars. I think eventually we could break as low as 0.60, but that might take some time. We are so oversold at this point, I think consolidation continues to be the main theme here.
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