EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Noisy in Early Tuesday Trading

EUR/USD Technical Analysis

The euro initially tried to rally a bit during the early hours on Tuesday, but then gave back the gains as we got fairly close to the 1.18 level. The 1.18 level course has shown significant resistance, and therefore, I think you’ve got a situation where the Euro is likely to continue to stay in this range. If we did break above the 1.18 level, then it opens up the possibility of moving to the 1.20 level, but all things being equal, this is a market that I think will probably see a lot of back and forth while trying to sort out what’s going to happen with both central banks. Remember, the Europeans have an interest rate decision on Thursday.

USD/JPY Technical Analysis

The US dollar has plunged against the Japanese yen. And as I record this, it is testing significant support at the 146.50 yen level. A bounce from here is a very real possibility. But if we were to break down below the 145.50 yen level, then it could open up a move down to 143 yen. Any rally at this point in time probably is more or less of the recovery type, not necessarily a huge move higher just waiting to happen. It is still a flat market, although we’re definitely pressing the bottom of a range.

AUD/USD Technical Analysis

The Australian dollar has rallied a bit, but it has not broken out yet. It’s pressing the top of the range for the swing high here. That being said, this is a market that certainly is trying to shift its overall attitude. Whether or not it can remains to be seen and certainly the US dollar is on its back foot at the moment. But it’s also worth noting that we have a situation where traders will look at this through the questioning eyes of somebody who has seen several short-term rallies fail.

I think give it enough time, we have to make a bigger decision, and while the Federal Reserve is expected to cut rates, if there is a lot of trouble in the global economy. The Australian dollar will fuel its effects, so I’m a bit cautious here. If we break the 0.6650 level, then I’m much more apt to get long.

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