News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bullish
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
GBP/USD
Mixed
USD/JPY
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Use this technical analysis pattern recognition skills test to sharpen your knowledge: https://t.co/Qgz89PTxnu https://t.co/8B8hqHahm1
  • The US Dollar finished off an eventful week after CPI and retail sales injected volatility into markets. FOMC is now in the Greenback’s sights as taper talks linger. Get your market update from @FxWestwater here: https://t.co/MHi0lfQ93j https://t.co/4XetwYAaNd
  • Get your snapshot update of the of market open and closing times for each major trading hub around the globe here: https://t.co/BgZLFljIhZ https://t.co/ZZRLV0Wkea
  • The Nasdaq 100 index has likely formed a bearish Gartley pattern, which hints at further downside potential. Negative MACD divergence on the weekly chart suggests that upward momentum may be fading. Get your market update from @margaretyjy here: https://t.co/GkMEkVA7YR https://t.co/E1vyCMVt6K
  • Struggling to define key levels? Floor-Trader Pivots assist traders in identifying areas in a chart where price is likely to approach and can be used to set appropriate targets, while effectively managing risk. Learn how to use this indicator here: https://t.co/Ye4m1G4lMu https://t.co/2TpkkUu7Hg
  • Tesla boss Elon Musk is seemingly running the cryptocurrency market single-handed this week with his tweets prompting a massive sell-off before today’s sharp rally. Get your market update from @nickcawley1 here: https://t.co/qGci02osOP https://t.co/Yp24Sakrfl
  • What suits your style of trading stocks or commodities? Find out what are the differences in these two markets here: https://t.co/BnA07cMV0s https://t.co/LDP3HlN4A3
  • GBP/USD on the front foot to close the week. Bulls aim for YTD peak, while EUR/GBP range is maintained. Get your market update from @JMcQueenFX here: https://t.co/neGBchlJ0O https://t.co/KME51FSF0D
  • What's the difference between leading and lagging indicators? Find out from here: https://t.co/vGx8HCrRwD https://t.co/7w5jodyzj0
  • Dealing with the fear of missing out – or FOMO – is a highly valuable skill for traders. Not only can FOMO have a negative emotional impact, it can cloud judgment and overshadow logic. Learn how you can control FOMO in your trading here: https://t.co/lgDf5cVYOn https://t.co/L3LPCph2ST
U.S. Dollar Strength Comes Roaring Back: FOMC, NFP Next Week

U.S. Dollar Strength Comes Roaring Back: FOMC, NFP Next Week

James Stanley, Senior Strategist

Talking Points:

- USD Strength continues to show as DXY trades at fresh three-month-highs. Next week brings a couple of critical USD-drivers with FOMC on Wednesday and NFP on Friday.

- We looked at this theme in-depth in yesterday’s webinar entitled, Trading the U.S. Dollar Breakout – Price Action Setups.

- Want to see how Euro and USD are holding up to the DailyFX Forecasts? Click here for full access.

To receive James Stanley’s Analysis directly via email, please sign up here

Next week brings a heavy outlay of drivers as we hear from the Federal Reserve on Wednesday, the Bank of England on Thursday for a Super Thursday event that carries a chance for an actual rate hikes; and Non-Farm Payrolls is released on Friday. Ahead of this outlay we have a significant breakout showing in the U.S. Dollar after yesterday’s European Central Bank rate decision. Earlier this week, we remarked that the huge zone of resistance that had held the highs in DXY over the past three months might not have to wait to be tested until we got to US GDP or even FOMC. With such a heavy allocation of the Euro in the DXY price, a down-side break in the Euro would likely spell USD-strength, and that’s precisely what’s happened over the past 24 hours after yesterday’s European Central Bank rate decision.

At that meeting, the ECB took an undeniably dovish tone, as had been the pattern from the bank in 2017. But even with that dovish drive from the ECB for most of the year, markets continued to price-in the possibility of a stimulus exit combined with the prospect of higher rates in 2018. Yesterday’s ECB meeting basically eradicated all of that: The ECB will reduce their bond purchases beginning in January of 2018, and will continue buying €30 Billion/month in European bonds. But they also said that they plan at rates staying at present levels for an extended period of time, inferred as 2019 at the earliest for any potential rate moves; and the ECB also said that they plan on reinvesting proceeds from their bond buying program well beyond the horizon of the program.

EUR/USD Daily: Break of Three-Month Support Opens Door for Deeper Retracement

U.S. Dollar Strength Comes Roaring Back: FOMC, NFP Next Week

Chart prepared by James Stanley

So, taper appears to be off the table, rate hikes appear to be outside of the realms of realistic discussion for the near-future, and the Euro caught an aggressive case of selling after yesterday’s rate decision. The Dollar, meanwhile, put in a significant break of a key zone of resistance as that Euro weakness was getting priced-in.

U.S. Dollar via ‘DXY’ Four-Hour: Inverted H&S Neck-Line Break into Three-Month Highs

U.S. Dollar Strength Comes Roaring Back: FOMC, NFP Next Week

Chart prepared by James Stanley

The zone of resistance from 94.08-94.30 had held the highs in DXY for almost three full months, with the daily candle from July 26 finding resistance there before the topside breakout drove through three months later. But after that break of resistance following yesterday’s ECB meeting, USD-strength continued, and then continued some more with price action making a fast approach at the psychological level at 95.00.

The 95.00 level was showing as near-term resistance ahead of this morning’s GDP report out of the U.S. That report came out rather positive, showing annualized 3% GDP growth versus an expectation of 2.6%. This gave another push-higher to the U.S. Dollar as prices ascended beyond that 95.00 psychological level, and at this point, there are potential resistance levels at 95.47, 95.90, 96.52, 97.42 and then 97.94.

U.S. Dollar via ‘DXY’ Four-Hour: Potential Resistance Levels Applied

U.S. Dollar Strength Comes Roaring Back: FOMC, NFP Next Week

Chart prepared by James Stanley

This opens the door for a continuation of USD-strength as we approach a heavy week of US-based drivers. Given the veracity with this recent topside move, traders can rightly be skeptical; and getting long at the moment presents its own set of drawbacks, as the prior swing-low is all the way down around 93.50, making trend-strategies rather unattractive given the risk that would need to be taken on to work with that type of strategy.

Alternatively, traders can wait for higher-low support. The prior zone of resistance that had previously held the highs for three months can be an interesting area to follow for such a theme. For those that wanted to track the theme a bit more aggressive, a zone of potential support from 94.49-94.72 can be used for shorter-term stances. If this does not come-in, the deeper levels of resistance can be used to look for an inflection back to a prior level of resistance (potentially new support), at which point a higher-low can become available.

Where to Look for USD Strength?

Given the down-side break in the Euro, many will likely be looking to trade a continuation of USD-strength there. And realistically, that stance can remain attractive near-term, as the recent down-side break of the 23.6% Fibonacci retracement opens the door for re-tests of 1.1500, 1.1423 and, if that’s taken out, 1.1216.

But there may be other areas of interest as well. Earlier in the week, we looked at using the Australian Dollar for this USD-strength scenario, and that move has continued to develop in a bearish fashion.

AUD/USD Daily: Aussie’s October Break-Down After Unable to Hold Above .8000

U.S. Dollar Strength Comes Roaring Back: FOMC, NFP Next Week

Chart prepared by James Stanley

Also of interest on the long-side of USD is USD/JPY, which is in the process of testing multi-month resistance around 114.50 as we’d seen earlier in the week. Next week brings a Bank of Japan rate decision, and this could, potentially, give another push of weakness to the Japanese Yen to finally resolve this months-old range.

USD/JPY Daily: Four-Month Range Resistance Remains

U.S. Dollar Strength Comes Roaring Back: FOMC, NFP Next Week

Chart prepared by James Stanley

Meanwhile, USD/CAD has shot towards the moon, as a dovish BoC meeting earlier in the week has prodded additional selling in the Canadian Dollar. And when combined with this rather new theme of USD-strength, prices have been jumping-higher on the chart, giving the appearance of a 1.3000 re-test in the not-too-distant future.

USD/CAD Four-Hour: Bullish Trend Goes Ballistic, Fast-Approaching 1.3000

U.S. Dollar Strength Comes Roaring Back: FOMC, NFP Next Week

Chart prepared by James Stanley

--- Written by James Stanley, Strategist for DailyFX.com

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Contact and follow James on Twitter: @JStanleyFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES