EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Stable After CPI Comes in as Expected

EUR/USD Technical Analysis

The euro has been very noisy and very choppy, but really, at this point in time, the market has compressed quite a bit. The 1.1850 level seems to be a little bit of a magnet for price as the market is trying to sort out whether or not the breakout was the real deal. The 1.18 level underneath is support by the 50-day EMA, offering it as well, so we’ll see if that holds. If we break down below the 50-day EMA, then I think the US dollar strengthens not only against the euro, but probably many other currencies.

USD/JPY Technical Analysis

The US dollar against the Japanese yen is a pair I’ve been watching for a while, and the Friday close for me will be very important. If we can break above the highs from Thursday, I think at that point in time it could be signifying that we are about to start rallying again. With that being the case, I like the idea of going long, and I recognize that perhaps the US dollar starts racing towards the 158-yen level again based on the interest rate differential.

Yes, I understand that the Japanese yields have picked up, and everybody’s expecting the Japanese to come in and become fiscally sound all of a sudden, but math won’t lie for Japan. Sooner or later, they’re going to have to tackle this debt issue or get a much weaker currency. It’s one or the other, it’s not both. So, with that being the case, I have been looking for buying opportunities. I just haven’t had it yet. The 152-yen level at the moment seems to be a bit of a floor. If we break down below there, then we probably drop and reset.

AUD/USD Technical Analysis

The Australian dollar initially fell during trading on Friday, but looks as if it is starting to bounce a bit as CPI came in as expected, and some of the other numbers beyond the core CPI numbers were a little bit lower than anticipated, so maybe people are starting to think that the Federal Reserve will still have to weaken the currency via cutting rates while the Reserve Bank of Australia has recently raised rates and may have to do it again. We’ll just have to wait and see. A lot of choppiness here. If we can clear 0.71, that opens up a move to the upside. If we drop from here, the 0.69 level ends up being a support level.

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