EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Continues to Slide

EUR/USD Technical Analysis

The euro had initially pulled back just a bit, only to turn around and show signs of strength again. All things being equal, this is a market that I think is getting a little overdone. So, a pullback probably makes a lot of sense, but if you are already long in this market, there’s really not a lot to do other than maybe a little bit of trade management. At this point, I think the 1.16 level should end up being a little bit of a floor. And as long as we can stay above there, I do think that the Euro will eventually try to get to the 1.20 level.

USD/JPY Technical Analysis

The US dollar has fallen pretty significantly against the Japanese yen during early trading as it looks like we are racing toward the 142 yen level. This is an area that’s been important multiple times and an area that I think probably will continue to attract traders and buyers, but we’ll just have to wait and see. The market of course does pay you to hang on to this pair and at this point in time, the market is starting to get a little extreme.

Pretty much every headline that you hear is how the US dollar is going to disappear. And my experience has been anytime you hear that, you’re getting close to the end. The Japanese yen is a little bit different, mainly due to the fact that the Bank of Japan is stuck with loose policy. Quite frankly, when you have a situation where people aren’t willing to step in and buy your bonds, that’s not a good look.

AUD/USD Technical Analysis

The Australian dollar initially fell, but it looks like it’s going to actually hold the 0.6550 level finally. This is an area that had been a little bit of a problem for some time. So, this is actually a really good sign for the Aussie. At this point in time, I suspect we will try to get to the 0.6650 level, but it’s probably going to be a grind just like the previous 200 pips. This is not a market that has anywhere to be anytime soon. It’s just gradually drifting higher, mainly, I suspect, because of US dollar weakness and not really anything to do with Australia itself. So, with this, I think you just have a grind, perhaps for another 100 pips before it’s all said and done.

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