EUR/USD Technical Analysis
The euro initially did try to rally a bit during the trading session on Thursday but has given back gains again to show signs of hesitation. Nonetheless, I don’t really think we have a scenario where you want to get short of this market because we have a massive support level near the 1.16 level that I do believe will eventually sort out the trend. Now, having said that, if we were to break down below that level, then you have to start asking questions of the entirety of the US dollar sell-off across the forex world. At that point, we would watch the 50-day EMA here in the Euro. The market rallying from here would just simply be a continuation and perhaps a move to the 1.19 level happening next.
USD/JPY Technical Analysis
The US dollar initially fell against the Japanese yen, but it is fighting back and that’s not a huge surprise considering that we have seen a massive amount of volatility and choppiness in a well-defined range, we are fairly close to it, and therefore you would expect a little bit of trouble. Nonetheless, I believe that we also have the 200-day EMA hanging around the 148-yen level, and I think that is a massive ceiling. The 50-day EMA is near the 145-yen level, and then the 142-yen level is the bottom of the overall larger range. Remember, the interest rate differential is the main driver of this pair, at least at the moment. And I think that will continue to be the case as the US dollar is building a basing pattern and short-term pullbacks are buying opportunities.
AUD/USD Technical Analysis
The Australian dollar has rallied during the trading session here on Thursday in the early hours. But really, at this point in time, we have the same problem. It’s the 0.6550 area offering a ton of resistance. Ultimately, I think this is a scenario where traders continue to see a lot of back and forth choppy behavior and I don’t see why that would change anytime soon. After all, we’ve been grinding higher, and grinding is probably the best word here for the market in what it’s been doing over the last couple of months. I believe you have a scenario where eventually we may try to break above the 0.66 level, but I’m not in a rush to get into this pair, mainly due to the fact that it just hasn’t been very dynamic.
It’s just been a grind back and forth. You basically have a slight tilt in a channel, but no momentum whatsoever. So quite frankly, there’s easier ways to short the US dollar. If we were to turn around and break down below the 50 day EMA, then that would be, for me at least, the same as breaking below a trend line and it could send the US dollar stronger against the Australian dollar making this pair drop towards the 200 day EMA possibly even lower.
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