EUR/USD, USD/JPY and AUD/USD Forecast – US Dollar Shows Differing Directions

EUR/USD Technical Analysis

The Euro has rallied quite nicely during the early hours here on Thursday, as we have cleanly broken above the resistance now and have even moved above the 1.17 level. So, with that, it looks like the euro has finally broken out and we could find quite a bit of noise in this area, but I think we’re going to see more of the same, more of a grind higher. I don’t know if it’s going to be an explosive move for a very long time, just an impulse, a pullback and an impulse as markets are orderly moving to the upside here, not necessarily in any type of panic or harsh moves.

USD/JPY Technical Analysis

The US dollar has fallen against the Japanese yen, but is starting to fight back again, so we’ll see. We’ll see how this plays out. It certainly looks like we’re going to stay somewhat range-bound, which makes sense because both of these currencies could end up being funding currencies for carry trades around the world if we get more of a risk on type of attitude. And it certainly looks like that’s what we are getting in a multitude of markets, not just the currency markets. The 146 yen level above is significant resistance. The 142 yen level underneath is significant support.

AUD/USD Technical Analysis

The Australian dollar continues to threaten the 0.6550 level but cannot quite get above there. If and when we get a daily close above that level, we could grind our way towards the 0.67 level, but that will be fight. It won’t be the easiest thing and you can already see that the sellers are starting to come back into the picture. I think the Australian dollar probably underperforms a lot of other currencies around the world, and this can be laid solely at the feet of China.

The Chinese economy, of course, has a whole plethora of issues, not the least of which is Donald Trump. So, as long as that’s the case, the Australian currency by extension may struggle a bit as it is quite often used as a proxy for Chinese investment. So with that being said, I’m watching the 0.6550 level closely, but so far, it’s holding as resistance.

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