**EUR/USD, USD/JPY, and AUD/USD Analysis: US Dollar Rally Sets Tone for Major Currency Pairs**
*Based on an article by Christopher Lewis for FX Empire. Supplemented with additional analysis from Reuters and Investing.com.*
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## US Dollar Strength: Broad Overview
The US Dollar demonstrated marked strength during early Tuesday trading, reinforcing its momentum against major currencies including the Euro (EUR), Japanese Yen (JPY), and Australian Dollar (AUD). This surge has been fueled by a complex interplay of factors: robust US economic data, expectations regarding Federal Reserve interest rates, and global geopolitical tensions that have increased demand for safe-haven assets.
Key points driving US Dollar strength:
– **Stronger-than-expected US economic data**: Recent US retail sales, jobless claims, and industrial production figures continue to indicate resilience in the American economy.
– **Federal Reserve interest rate policy**: Markets are adjusting to signals from Fed officials that higher rates may persist for longer, with the potential for further hikes if inflation remains stubborn.
– **Geopolitical concerns**: Ongoing uncertainty in Europe and Asia has supported demand for the Dollar as a safe-haven currency.
– **Weakness in other economies**: Mixed data from the Eurozone, Japan, and Australia highlight divergent economic paths contributing to the Dollar’s strength.
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## EUR/USD Technical and Fundamental Outlook
The EUR/USD pair fell further in Tuesday’s session, pressured by the US Dollar rally and disappointing data out of the Eurozone.
### Eurozone Developments
– **Economic performance**: The Eurozone economy has shown tepid growth, with Germany in particular teetering on recession. Recent PMI data indicates ongoing struggles for both the manufacturing and services sectors.
– **ECB monetary policy**: While the European Central Bank (ECB) ended its rate-hiking cycle and signaled caution amid weak growth, it has also struck a hawkish tone about keeping rates elevated to combat inflation.
– **Political uncertainty**: Fresh concerns regarding political stability, including impasses over fiscal policy in France and Italy, have put additional pressure on the Euro.
### Technical Analysis
– The EUR/USD pair tested support around **1.0700**. As of Tuesday’s session, the currency breached this level, suggesting more downside room.
– **Resistance levels** can be seen at 1.0800 and then 1.0850.
– **Support levels** are identified at 1.0650 and, beyond that, closer to 1.0600.
– The 50-day and 200-day moving averages are exerting downward pressure on the pair, with a confirmed bearish crossover.
– Relative Strength Index (RSI) indicators have not yet entered oversold territory, indicating further scope for declines.
### Outlook
– A continued slide below 1.0750 makes a test of 1.0650 plausible.
– Downside risks prevail unless the pair stages a sustained close above 1.0800.
– Near
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