EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Strengthening Again

EUR/USD Technical Analysis

The euro has fallen again during the trading session on Thursday as we continue to see a bit of a pullback. The 50-day EMA sits just above the 1.15 level, which of course is a large, round, psychologically significant figure and an area where we had seen a lot of resistance previously. So, the question at this point in time looks as if the market is going to test this for market memory. The Euro, of course, has been in a strong uptrend for some time. So, I’m not ready to start shorting it yet, but if we get below the 1.15 level, it’s possible I may end up doing exactly that. In the meantime, I’m waiting to see if we get a reaction to this support region.

USD/JPY Technical Analysis

The US dollar has rallied quite nicely against the Japanese yen as the 148 yen level and the 50 day EMA both offered support. I suspect given enough time, this is a market that could go looking to the 151 yen level, which is an area we had seen a little bit of a double top at previously. So, I do think that might be where we’re heading in the short term. If we were to break down below the lows of the crazy Wednesday candlestick, then that could throw that in the garbage bin. But all things being equal, this is a market that pays you to hang on to it. And clearly it looks like we’re trying to do everything we can to rally.

AUD/USD Technical Analysis

The Australian dollar has broken down pretty significantly during the trading session here on Thursday, as we are below the 200 day EMA and threatening to change the overall trend. The 50 day EMA sits just below and breaking down below that on a daily close could very well open up the trap door and send the Aussie much lower. It is worth noting that during the entire time that the US dollar was getting beaten up by the Euro and the British pound, for example, the Asian currencies have been struggling.

So now if we start to see US strength, the currencies in Asia will all end up being shorts. That includes the Japanese yen as we have seen, the Asian currencies such as the Australian dollar, the New Zealand dollar, even some of the smaller ones like the Thai baht. So, this looks like an anti-Asia play if anything. As the US dollar strengthens, it only exacerbates that move.

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