Forex Market Forecast – Euro, Pound, and Yen Test Support as US Yields Drift

EUR/USD Technical Analysis

The Euro has bounced a bit during the early part of the trading session here on Tuesday as we are sitting just above a short-term support level that has been important a couple of times. It’ll be interesting to see if the Euro can continue to climb. The 1.1550 level above could be a little bit of a psychological barrier, but as we drift through the day, and that’s the big key here- we’re drifting, I’ll be watching the interest rates in America to see if they are rising or climbing, and whether or not that makes the Euro susceptible to US dollar strength.

GBP/USD Technical Analysis

The British pound has rallied a bit early from a support level, gave back those gains, and now looks as if it’s trying to fight to get back above the 1.35 level again. There has been a bit of support just below there over the last couple of days, so it’ll be worth watching to see if markets are going to continue to use this as a launching pad or if it is a situation where we are just somewhat lost. The interest rates in America have been drifting back and forth during the day. Over the last couple of hours, we’ve seen them drift lower. That could help the pound in theory.

USD/JPY Technical Analysis

The US dollar is bouncing slightly from a short-term support level in the form of 159 yen against the Japanese yen. This, of course, is a market that’s going to be a little different than others as the Bank of Japan has recently intervened, but we’ve seen a nice bounce back so far, and it looks as if the next major barrier is somewhere closer to the 160 yen level.

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