EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Softer in Early Monday Session

EUR/USD Technical Analysis

The euro rallied slightly during the early part of the Monday session as we are trying to figure out whether or not we can break out to the upside. We have been consolidating for a while and therefore it’s not a huge surprise to see that we’re still in that consolidation, with the 50 day EMA at the 1.1622 level offering support right along with the 1.16 level underneath there offering support.

The 1.18 level is a level that I think a lot of people will be watching very closely, as it was a swing high, and really, at this point, even though the euro has been a little bit positive against the dollar, it doesn’t scream ready for a breakout quite yet.

USD/JPY Technical Analysis

The US dollar has been all over the place against the Japanese yen during early trading as we are dancing around the 200 day EMA. I think at this point in time, you have to look at this market as being very neutral. And despite the fact that we’ve seen a little bit of red here, it’s worth noting that we opened up the week here with a gap higher. So maybe that tells us something.

Really at this point in time though, I think this is neutral, probably just hanging out between now and the Federal Reserve meeting and statement because it will be all about what the Federal Reserve is going to do going forward. Ultimately, I think we just continue the same pattern.

AUD/USD Technical Analysis

The Australian dollar has been strong early in the session, but we are starting to approach that area of significant trouble again, right around the 0.66 level. And one thing that we do know is that out of all of these currencies, the Australian dollar has been the least impressive against the greenback. So it’ll be interesting to see if anything can truly change. It looks good at the moment, but we’ve got to get through the 0.6625 region for me to get excited about this because quite frankly, the Australian dollar has been an underperformer for months now.

While the Euro, the British pound, and several other currencies have been beating up on the dollar, the Aussie has been lackluster. You can say the same thing about the Japanese yen and the New Zealand dollar. So that probably tells you everything you need to know about Asia at the moment. Nonetheless, I’ll be watching this for a potential breakout or signs of exhaustion that I can start shorting.

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