USD/JPY, AUD/USD and NZD/USD Forecasts – US Dollar Continues to Be Strong

USD/JPY Technical Analysis

The US dollar continues to grind higher overall against the Japanese yen as we have gone both bullish and bearish in early trading, but make no mistake about it, it’s obvious that this is a bullish market in general. The interest rate differential continues to favor the United States dollar, and now it looks like the 160-yen level might be your floor.

We have broken to levels not seen since 1986, and quite frankly, I think we have a lot further to go. Holding on to this position and collecting swaps will more likely than not be the play going forward for most traders. I have no interest whatsoever in trying to short this market, and quite frankly, if the Bank of Japan were to get involved again and intervene, good, I’ll only buy it lower.

AUD/USD Technical Analysis

The Australian dollar is testing the 0.6950 support level. It’s also more likely than not going to try to work its way down to the 200-day EMA. Breaking below there opens up a drop to the 0.6830 level, a swing low from the very end of February. Short-term rallies at this point in time end up being selling opportunities, with the 50-day EMA, I think, being your ceiling. If we break above there, that will change everything.

NZD/USD Technical Analysis

The New Zealand dollar is on the cusp of breaking down to the 0.56 level. We just need to get a little bit lower than we are right now. Short-term rallies here are to be sold into.

Quite frankly, the New Zealand dollar has been struggling for a while. I don’t see how that changes with the high interest rates in the United States and, of course, concerns about Asia. New Zealand obviously is very exposed to economic movement in the Asian region. I remain bearish on this pair.

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