EUR/USD, USD/JPY and GBP/USD Forecasts – US Dollar Falls with Rates Dropping

EUR/USD Technical Analysis

The Euro has broken much higher against the US Dollar, slicing through the 50-day EMA pretty quickly and then now sees itself testing the 1.17 level. This is a market that has been consolidating but it now looks like we have broken out of that level. The next move to the upside could bring the Euro all the way to the 1.18 level.

This will more likely than not be driven by what happens with US rates, which, of course, took a bit of a hit as the war premium was taken out. Short-term pullbacks are possible. I wouldn’t get short again until something kicks off in the Middle East or if we break down below 1.16.

USD/JPY Technical Analysis

The US Dollar finds itself on the back foot against the Japanese Yen, but it is right at support with the 158 Yen level and the 50-day EMA supporting that. A move to the upside here could send the US Dollar back to the 160 Yen level and remember this pair is testing just above the 160 Yen level a swing high from 1990.

I do think that there is a structural problem with the Japanese Yen so even if you see a weak US Dollar elsewhere that may not be the case here. I am looking to play any bounce that we get in this general vicinity.

GBP/USD Technical Analysis

The British Pound took off against the US Dollar, and it now finds itself reaching toward the 1.35 level. This is an area that’s been important multiple times. We’ll have to see whether or not it holds up as resistance, but this most clearly is a relief rally that is based on risk appetite coming back into the market.

You can see that not only in the currency markets, but you can see it in some of the indices in pre-market trading in America. At this point in time, I’ll keep an eye on 1.35. We’ll see if there’s exhaustion there to re-enter the consolidation or if we break out to the upside. I certainly wouldn’t chase it all the way up here.

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