US Dollar Returns to Resistance, NFP on Deck: EUR/USD, USD/JPY
US Dollar, EUR/USD, USD/JPY Price Analysis
- US Dollar strength has come roaring back this week.
- This sets the stage for tomorrow’s NFP report.
- Both EUR/USD and USD/JPY have put in moves to key zones on the back of this week’s USD price action.
US Dollar Bulls Take Over… Again
US Dollar strength is starting to become a trend in 2020 trade…
Despite last week’s post-FOMC sell-off, US Dollar bulls came back into the matter this week and so far, it’s been a one-way show. The USD has pushed up to yet another zone of key resistance, this time around the 98.33 level that was in-play in November and early-December. This zone had similarly set resistance in April and May of last year; and with Non-Farm Payrolls now less than 24 hours away, it seems the stage has been set in the US Dollar’s technical backdrop. This equates to themes in both EUR/USD and USD/JPY which remain of interest ahead of tomorrow’s jobs reports.
US Dollar Daily Chart
EUR/USD Re-Tests Key Support Zone
Given that onslaught of USD-strength, EUR/USD has seen price action revert right back down to a big zone of support that’s been holding the lows for the past three-and-a-half months. Given the increasing frequency of tests, this zone may not hold for much longer and this could become an interesting setup for those looking for a continuation of USD-strength around tomorrow’s NFP. Downside breakout potential exists, with next supports located around 1.0955 followed by the 1.0900 psychological level.
EUR/USD Eight-Hour Price Chart
USD/JPY Re-Tests Key Resistance
Another area that’s shown significant movement around this recent USD-theme has been USD/JPY. Last week saw the pair taken-over by both USD-weakness and JPY-strength as fears of the spreading coronavirus took global markets by hold. That threat has dissipated a bit so far this week, and in response USD/JPY has reversed much of that prior bearish move.
But – given the longer-term technical backdrop, along with the potential for change in both USD and fear-based themes around coronavirus, the short-side of the pair can remain as attractive as long as price action remains subdued below the January high. This keeps the door open for short-side USD-scenarios in the pair ahead of and around tomorrow’s NFP report.
USDJPY Daily Price Chart
--- Written by James Stanley, Strategist for DailyFX.com
Contact and follow James on Twitter: @JStanleyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.