EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Strengthens Before the FOMC Announcement

EUR/USD Technical Analysis

The euro initially did try to rally a bit during the session here on Wednesday but has given back the gains to show signs of weakness. We are currently trading in the overall range of support between the 1.15 level and the 1.16 level. The 50-day EMA is hanging around this same area as well, and I think at this point we’re about to make a big decision. If at the end of the session we find the euro well below the 1.15 level, I think at that point in time, the trend will change. On the other hand, if we were to break above the 1.16 level, then we could go looking to the 1.18 level.

USD/JPY Technical Analysis

The US dollar fell a bit during the course of the trading session but has since bounced as the 200 day EMA came into the picture. If we can break above the 149 yen level, then it opens up the possibility of the market going to the 151 yen level. If we break down from here, I’ll be watching the 50 day EMA right around the 146 yen level, an area that has been important in the past and I think value hunters would return to. That being said, keep in mind that we have the Federal Reserve on Wednesday and early Thursday we have the Bank of Japan. So, this is going to be a dangerous place to be.

AUD/USD Technical Analysis

The Australian dollar looks really weak at this point. By the end of the day, we should have a situation where we may have a longer term trade set up. I’m watching the 200 day EMA. If we close below there, then I would consider shorting the Aussie. If we end up rallying, then I think we’re just going to stay in this channel that we’ve been on for what seems like a lifetime here. So again, this is going to be a situation much like the euro. We’ll just have to see how things close after all of that. And it’ll be interesting to see because we may get a very clear signal finally.

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