EUR/USD Technical Analysis

The euro has fallen quite a bit during the week, especially as the ECB decided to cut rates, but it’s worth noting that the market is holding on to the 1.08 level as we have bounced from there. And that of course is crucial. As things stand right now, although the Euro has sold off quite drastically, it doesn’t look like we might get a little bit of a bounce here. And if that’s going to be the case, it’s probably simple profit taking.

I don’t necessarily know that anything on this chart suggests anything other than we just continue to consolidate in the same area we’ve been in for two years. And as such, I’m watching the 1.08 level because if we break down below there, we could go to the 1.06 level. On a rally from here, the 1.10 level above almost certainly would cause a certain amount of resistance if for no other reason than the fact that it’s a psychologically important figure.

USD/JPY Technical Analysis

The US dollar has rallied rather significantly during the trading week against the Japanese yen. And as a result, we have pierced the 150 yen level. That being said though, it does look like it’s trying to give back some of those gains, but I think ultimately the interest rate differential will continue to be a major issue for the Japanese yen. And I do think that we eventually go higher. On a break above the 150 yen level, that opens up the possibility of a move to 152 yen, and perhaps even higher than that.

Quite frankly, the Bank of Japan has thrown in the towel because the tightening monetary conditions have caused such chaos. And therefore, I do think that we will continue the uptrend over the longer term, but it may have a little bit of a pullback in the meantime to build up momentum.

AUD/USD Technical Analysis

The Australian dollar has fallen toward the 0.6650 level only to turn around and bounce quite nicely. Because of this, it looks like we might head back towards the 0.6850 level, which was the top of the overall consolidation of the last roughly two years. If we break down below the 0.6650 level, then it’s likely that this market will start falling, perhaps reaching down to the 0.6450 level.

The Australian dollar of course is highly sensitive to risk appetite, so you will have to keep that in mind as it is so heavily exposed to the commodity markets and of course Asia. With everything being the way it is right now, I would not be surprised at all to see this market run right back to the top of the range, only to run into trouble yet again. On the other hand, if we break down below the 0.6650 level, it’s very likely that the market will fall pretty precipitously, but it does have a massive amount of support near that 0.6450 region.