EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Recovers Slightly on Monday

EUR/USD Technical Analysis

The Euro has pulled back slightly against the U.S. dollar in very early Monday trading. At this point in time, I don’t know how much I read into this, other than perhaps the Friday candlestick was a bit much. While there is suggestion that the Federal Reserve might cut interest rates in September—and in fact, I think that’s pretty much a given at this point—the question then becomes why? Are people concerned about the global economy? Because if that’s the case, the U.S. dollar strengthens in that environment, and you have to be very cognizant of that possibility.

USD/JPY Technical Analysis

The U.S. dollar has rallied against the Japanese yen as well during trading, as you can see here early Monday, but we still have the 148 yen barrier above to pay close attention to. So, it’s really not until we break above 148.50 yen that I think a true breakout can be assumed. In the meantime, I do like buying dips. You do get paid to hang on to the dollar against the yen and the 50-day EMA has been somewhat reliable as far as support is concerned over the last, say, two months or so.

The 200-day EMA is in this neighborhood, but it is flat, suggesting that perhaps people just aren’t that interested in putting a lot of risk on. That could be true, but I would also point out that we are in the dead of summer, and that of course means that volume is a little bit lighter anyway.

AUD/USD Technical Analysis

And in the Australian dollar, it looks like we are rallying just a touch, but at this point in time I would also point out that the 50-day EMA seems to be offering a bit of resistance. And then again, we have the 0.6550 level. That’s an area that has been a bit of trouble for quite some time. You’ll notice that there was a previous uptrend line that has proven itself to be somewhat resistant as well. It’s a bit of a messy trend line, but it does give you an idea of the overall attitude of the market.

While the Euro and the pound were both performing very well against the U.S. dollar, the Australian dollar just ripped it, so I don’t like the Aussie dollar in general and I do think that eventually, if the U.S. dollar starts to pick up strength, this one here is going to fall apart. I prefer to fade rallies in this market.

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