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
More View more
Real Time News
  • $USD fresh 2021 high didn't get much traction on the first test above resistance, but it's been quite the move since last week. Friday should be a big day for the USD - PCE, ISM and Sentiment numbers https://t.co/TfIp6Z8mBr https://t.co/qtFaKzxHIJ
  • Gold and silver not having a good day so far, rising US Treasury yields is a headwind for precious metals and non-interest bearing assets in general #trading $XAUUSD $XAGUSD
  • US 10-YEAR YIELD RISES TO 1.53%, LAST WEEK IT WAS SITTING BELOW 1.30%. THE RAPID INCREASE IN TREASURY RATES IS BAD FOR TECH STOCKS, NASDAQ AT RISK, $ARKK COULD ALSO SUFFER HEAVY LOSSES #TRADIDG $NDX
  • there it is $USDJPY up for a test of the 2021 high fibo level at 111.61, next major level at 112.50 this zone has held the highs in 2019, 2020 and so far in 2021 https://t.co/PwShmUDOn0 https://t.co/in6dnrIq0Q
  • ...let's see how far the brinkmanship goes and whether the rating agencies feel a rating downgrade is necessary for the constant pressure on its finances
  • - Financial markets have brought forward prospects for BoE tightening into 2022, this is not supportive for inflation surge
  • Treasury Secretary Yellen will no doubt be touching on this at today's Senate Finance Committee meeting, but she has sent a formal letter to Congress to say the US will likely hit its debt ceiling by October 18th
  • US likely to hit debt ceiling by October 18th - Treasury Secretary Yellen
  • - Signal from 5y5y inflation measures is not troubling
  • BoE's Mann - Price growth for natural gas is pretty extreme, but need to look if it will continue $GBP
US Dollar Price Action Setups: EUR/USD, GBP/USD, USD/CAD

US Dollar Price Action Setups: EUR/USD, GBP/USD, USD/CAD

James Stanley, Senior Strategist

US Dollar Talking Points:

  • The US Dollar finds itself between fairly well-defined support and resistance.
  • The big driver for this week is Friday’s NFP release, and there’s perhaps even more emphasis on employment data following last week’s FOMC rate decision.
  • The analysis contained in article relies on price action and chart formations. To learn more about price action or chart patterns, check out our DailyFX Education section.

The US Dollar is coming into the week with some relative balance given the nearby support and resistance that are currently holding price. This is a different picture from last week, however, as the FOMC rate decision on Wednesday sent the USD spiraling-lower until support played-out from a confluent area of Fibonacci retracements. That support inflection marked a fresh monthly low, and led to a bounce on Friday that caught resistance at a familiar area, taken from prior support around 92.20-92.26 in DXY.

To learn more about Fibonacci, check out DailyFX Education

US Dollar Four-Hour Price Chart

US Dollar Price Action Setups: EUR/USD, GBP/USD, USD/CAD

Chart prepared by James Stanley; USD, DXY on Tradingview

Taking a step back on the chart, and last week’s bearish move broke through the bottom of a rising wedge formation. Such patters are often followed with the aim of bearish reversals, and this could produce a deeper downside run should the reversal continue. But the big sticking point as to whether or not that takes place is this week’s data with key emphasis on that NFP report.

To learn more about the rising wedge, check out DailyFX Education

Employment is somewhat of the hot button at the Federal Reserve right now and with inflation printing above 5% last month, lagging employment is one of the items that’s allowed the Fed to stay pedal-to-the-floor on the accommodation front. If that changes, so could price behaviors; and likely, there will be considerable focus on this Friday’s jobs report as it’s the last such report before the Jackson Hole Economic Symposium later this month.

US Dollar Daily Price Chart

US Dollar Price Action Setups: EUR/USD, GBP/USD, USD/CAD

Chart prepared by James Stanley; USD, DXY on Tradingview

EUR/USD Sticking Between Support and Resistance

Very similar to the short-term backdrop in USD above, EUR/USD is holding between short-term support and resistance levels.

The pair came very close to testing the 2021 low in late-July, but caught a bid last week after the FOMC. The takeaway here, in my opinion, is how that lift seems abbreviated when compared to what showed in GBP/USD, which we’ll look at below.

After finding resistance in the 1.1885-1.1900 zone, a quick check back to support around 1.1850 showed, with prices soon returning to resistance. This can keep the door open for short-term breakouts in the pair should that high get taken out. But, given the additional run that showed in GBP/USD on the heels of last week’s FOMC, the question must be asked whether EUR/USD is the most optimal vehicle for USD-weakness scenarios.

EUR/USD Four-Hour Price Chart

US Dollar Price Action Setups: EUR/USD, GBP/USD, USD/CAD

Chart prepared by James Stanley; EURUSD on Tradingview

GBP/USD: Cable Breakout Take-Out

I had looked at GBP/USD just ahead of the FOMC last week, remarking on its bullish potential given price’s adherence to a nearby Fibonacci level at 1.3879.

The breakout showed with force as GBP/USD made a run towards the 1.4000 psychological level, falling a bit short before pulling back. And already this week, that 3879 Fibonacci level has come back into play as support after prices pulled back.

This can keep the door open for topside scenarios in the pair.

GBP/USD Four-Hour Price Chart

US Dollar Price Action Setups: EUR/USD, GBP/USD, USD/CAD

Chart prepared by James Stanley; GBPUSD on Tradingview

USD/CAD Tips Up to 1.2500

USD/CAD ran into a really big level last week at 1.2426, where there was both a price action swing and a trendline projection in tight proximity. That support held and prices have since bounced, with USD/CAD now testing above the 1.2500 psychological level.

This presents an interesting setup, particularly for USD-bears. USD bears can monitor the move to see whether sellers begin to respond in the 1.2500-1.2521 area.

To learn more about psychological levels, check out DailyFX Education

USD/CAD Four-Hour Price Chart

US Dollar Price Action Setups: EUR/USD, GBP/USD, USD/CAD

Chart prepared by James Stanley; USDCAD on Tradingview

--- Written by James Stanley, Senior 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.

DISCLOSURES