EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Strengthens Early on Wednesday

EUR/USD Technical Analysis

The euro dropped a bit in the early part of the trading session on Wednesday to crash below the 1.18 level. We have not made a lower low yet, but it certainly is interesting because I’ve been hearing about the depth of the US dollar for about two months, and since then, we really haven’t gone anywhere but occasionally will fall. So really at this point, I think you’ve got a situation where we might be seeing traders run towards the safety of the US dollar. We’ll just have to wait and see.

As things stand right now, I’m just assuming that we are re-entering the previous consolidation area. And it’s not until we break down below the 1.16 level that I think it becomes anything more nefarious than that. But the Euro right now just isn’t showing the type of strength that one would expect.

USD/JPY Technical Analysis

The US dollar has rallied nicely against the Japanese yen, and that’s probably not a huge surprise. Every time it falls, it rallies against the yen due to the interest rate differential. That interest rate differential is still a very real thing. And therefore, I think traders will continue to look at dips as potential buying opportunities. If we can break above the 149 yen level, then it opens up the door to the 151 yen level.

AUD/USD Technical Analysis

The Australian dollar has risen against the US dollar a little bit in the early hours here on Wednesday, but it must be said that it is giving back some of those gains. I find that interesting because it looks like we’re going to do everything we can to fall back towards the 0.6550 level, an area that I have talked about ad nauseum for several months now as a magnet for price.

It also features 50-day EMA, so I guess that makes some sense as well. If we do rally from here and it actually sticks, unlike the last couple of days, then we could go looking to the 0.67 level, but let us not forget that the Australian dollar was a major underperformer for months against the greenback.

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