US Dollar, EURUSD Talking Points:
- US Dollar bulls re-grasped control of near-term price action in the currency following the Tuesday pullback. On the driver-side of the matter, later today brings comments from FOMC member Patrick Harker and Rafael Bostic is set to speak on the topic of workforce development tomorrow at 9:55 AM ET. On the data-front, U. of Mich. Sentiment numbers are released tomorrow at 10 AM ET.
- With USD strength continuing, EURUSD has made another push down into the longer-term support zone that runs from 1.1215-1.1300. USDJPY is trading at fresh 2019 highs above the 111.00 handle, and GBP/USD is tilting down to fresh lows after trading below a key support zone on the chart. On the side of potential USD-weakness, USDCAD remains of interest.
- DailyFX Forecasts are published on a variety of currencies such as the US Dollar or the Euro and are available from the DailyFX Trading Guides page. If you’re looking to improve your trading approach, check out Traits of Successful Traders. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide.
Do you want to see how retail traders are currently trading the US Dollar? Check out our IG Client Sentiment Indicator.
EUR/USD Threatens 2019 Lows as Bears Continue to Push
Weakness has held in EUR/USD after the Tuesday pop, and prices are back to testing the long-term support zone that runs between 1.1215-1.1300. The 1.1215 test came in early-November, and since then there have been multiple tests within this zone, which has led to range-bound behavior when coupled with the resistance zone that exists from 1.1448-1.1500. The big question at this point is whether bears can continue to push for a deeper test within this zone or, perhaps even, the first test below 1.1215 since June of 2017.
EUR/USD Eight-Hour Price Chart
US Dollar Breakout Pulls Back from Fresh HIghs
The early-week pullback in the US Dollar remained relatively shallow as buyers returned to show support around prior resistance at 96.68. After a strong day of price action yesterday, Dollar bulls have pushed the currency back-up to fresh 2019 highs; with the next area of resistance interest on the chart around the 97.70 level that marks the November and December highs in the currency. On the support side of the matter, prior areas of resistance around 97.00 and 96.68 remain of interest for bullish continuation strategies.
US Dollar Four-Hour Price Chart
USD/JPY Breakout Holds Support, Tests 111.00
On the long side of the US Dollar, USD/JPY put in a bullish breakout after the open of this week, and buyers have continued to push prices higher for much of the period; even during the Tuesday pullback in USD. But, with prices now sitting at fresh two-month highs, and with buyers appearing unenthused to test significantly above the 111.00 handle, the big question is whether a pullback develops here as the bullish trend takes a pause. If so, there are two areas of support potential that could remain intriguing to buyers: The nearest of which is around the Tuesday swing-low of 110.30, and a bit lower exists the prior resistance zone from 109.67-110.00, which had held the highs in the pair until this week’s topside breakout. If that zone is unable to hold the lows, then focus moves towards the bullish trend-line, currently projecting around the 109.00 area on the USDJPY chart.
USDJPY Four-Hour Price Chart
GBP/USD to Fresh Lows, Focus on 1.2671-1.2735 Support Zone
Bears have made a push through the 1.2828-1.2850 support zone as US Dollar strength has remained a fairly active theme, and with prices now pushing down to fresh February lows, the big question is whether or not another item of support develops in a deeper zone of interest. As discussed in yesterday’s technical article, the area between 1.2671-1.2735 presents an area of interest for this theme: The 1.2671 level is the 23.6% Fibonacci retracement of the Brexit move, and this price helped to set the low in the pair in both August of last year, and again in mid-January after prices in the pair recovered from the brutal sell-off that marked the start of this year’s trade.
GBP/USD Four-Hour Price Chart
USDCAD Holds Support – Will Sellers Respond Around Resistance?
Given the topside push in USD so far this week, it’s been a rough outing so far for USD bears. There are, however, a couple of potentially interesting areas for such a theme. USDCAD has held support after pushing down to a near-term lower-low earlier this week; but this does keep alive the continuation of lower-lows and lower-highs after last week’s resistance set-in around 1.3325. With USD-strength remaining as a very prominent theme, the big question here is whether sellers respond ahead of a re-test of that resistance level. If so, the door could remain open for short-side themes, looking for another lower-low to print. But, if prices do break above 1.3325, then the next area of resistance may soon come into play at 1.3361-1.3385; and a break above that area would lead to fresh monthly highs.
USDCAD Four-Hour Price Chart
Chart prepared by James Stanley
To read more:
Are you looking for longer-term analysis on the U.S. Dollar? Our DailyFX Forecasts for Q1 have a section for each major currency, and we also offer a plethora of resources on USD-pairs such as EUR/USD, GBP/USD, USD/JPY, AUD/USD. Traders can also stay up with near-term positioning via our IG Client Sentiment Indicator.
Forex Trading Resources
DailyFX offers a plethora of tools, indicators and resources to help traders. For those looking for trading ideas, our IG Client Sentiment shows the positioning of retail traders with actual live trades and positions. Our trading guides bring our DailyFX Quarterly Forecasts and our Top Trading Opportunities; and our real-time news feed has intra-day interactions from the DailyFX team. And if you’re looking for real-time analysis, our DailyFX Webinars offer numerous sessions each week in which you can see how and why we’re looking at what we’re looking at.
If you’re looking for educational information, our New to FX guide is there to help new(er) traders while our Traits of Successful Traders research is built to help sharpen the skill set by focusing on risk and trade management.
--- Written by James Stanley, Strategist for DailyFX.com
Contact and follow James on Twitter: @JStanleyFX
