Title: EUR/USD, USD/JPY, and AUD/USD Forecast: US Dollar Shows Modest Recovery
Original Author: Christopher Lewis
Source: FX Empire (https://www.fxempire.com/forecasts/article/eur-usd-usd-jpy-and-aud-usd-forecast-us-dollar-fighting-back-a-bit-1536328)
The US Dollar showed signs of stabilizing early in the trading week as investors looked ahead to key economic data, central bank commentary, and broader market sentiment. As of the latest market sessions, the greenback is regaining some lost ground against major currency counterparts such as the euro, the Japanese yen, and the Australian dollar. This modest rebound could represent a temporary recovery or possibly the beginning of a more sustained dollar strengthening, depending on broader macroeconomic developments and investor positioning going into the third quarter.
Across the major currency pairs, the landscape remains characterized by uncertainty, driven by evolving rate expectations, inflation data, and geopolitical developments. In particular, traders are watching for hints about future policy moves from both the Federal Reserve and other central banks, creating significant volatility in the foreign exchange markets.
EUR/USD: Euro Faces Resistance Amid Choppy Trading
The EUR/USD currency pair has encountered resistance just ahead of the 1.09 level, where bullish momentum appears to be tempered. After a sharp upward move recently, the euro is showing signs of fatigue, suggesting a consolidation or even a pullback toward lower support levels.
Key takeaways:
– The euro reached toward the resistance zone near 1.09, which aligns with previous price ceilings and tested highs from April and May.
– Sellers emerged in this region, pushing the pair slightly lower as traders reacted to mixed data coming from the eurozone and the US.
– Technically, 1.09 remains a stubborn resistance level, and the lack of a decisive breakout indicates potential continued range-bound trading.
– Initial support lies around 1.08, a psychologically relevant zone that has acted as a base in multiple recent sessions.
– A break below 1.08 could trigger further selling pressure, with the next target being the 50-day Exponential Moving Average (EMA) near 1.0750.
– On the upside, a daily close above 1.09 may re-energize the bulls and set up a move toward 1.10 and beyond.
Macro factors influencing the EUR/USD pair include:
– Recent inflation data from the Eurozone showing some cooling, which may influence the European Central Bank’s (ECB) rate path.
– US inflation figures and economic indicators, particularly CPI and jobless claims, have added to the market’s confusion regarding the Fed’s potential policy tweaks.
– Diverging economic growth projections between the US and the Eurozone also add to the uncertainty, with the US economy showing slightly more resilience.
At this juncture, traders should watch for confirmation of a breakout or breakdown. Sideways trading appears likely unless a major catalyst emerges from economic figures or central bank speeches.
USD/JPY: Pair Remains Bullish as Yen Stays Weak
In the case of USD/JPY, the pair continues trading in a strongly bullish trend, as demand for the Japanese yen remains subdued amid Japan’s ultra-loose monetary policy. The yen’s weakness has been an ongoing theme throughout the year, driven by the Bank of Japan’s dovish stance and continued reluctance to tighten policy significantly.
Highlights for USD/JPY:
– USD/JPY is attempting to resume its uptrend after a brief consolidation phase around the 153-155 area.
– The 50-day EMA near 154 continues to provide dynamic support, with price action remaining above this moving average for several weeks.
– Support can be found at various levels, including:
– 153.00: A round-number psychological level and prior resistance-turned-support.
– 152.00: A deeper pullback target that aligns with key Fibonacci retracement zones.
– On the resistance side, traders are eyeing
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