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US Dollar Pre-NFP Price Action Setups: EUR/USD, GBP/USD, AUD/USD

US Dollar Pre-NFP Price Action Setups: EUR/USD, GBP/USD, AUD/USD

James Stanley, Senior Strategist

US Dollar, EUR/USD, GBP/USD, AUD/USD Talking Points:

  • Tomorrow brings Non-farm Payrolls out of the United States, with the expectation for 750k jobs to have been added in the month of August.
  • The US Dollar has continued to fall, setting another fresh three-week-low in the process.
  • 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.

We’re now into September and that means its time for Non-farm Payrolls. This should be a widely-watched report as last week’s Jackson Hole Economic Symposium helped to push some pressure on this data release. Jerome Powell remarked last Friday that the US economy has met the mark regarding the Fed’s ‘significant further progress’ in terms of inflation, but not yet on employment.

If the Fed is, in fact, going to begin tapering asset purchases in 2021, they’re running out of time. There’s two more quarterly rate decisions in which the Fed will furnish updated guidance and traditionally this has been the type of meeting where they’ll make major announcements. These are set to take place in September and December; so tomorrow’s NFP report will be the last such report that the Fed gets to see ahead of that September rate decision.

To learn more about NFP, check out DailyFX Education

Ahead of the release, the US Dollar has continued to fall, furthering the recent downtrend as prices have re-engaged with support in the 92.19-92.26 spot on the DXY chart.

US Dollar Four-Hour Price Chart

US Dollar Four Hour Price Chart

Chart prepared by James Stanley; USD, DXY on Tradingview

EUR/USD Breakout Continues to Rally

On the short side of the US Dollar, EUR/USD has continued to show strength, breaking out to a fresh three-week-high and continuing to rally. I had looked at the pair last week as the 1.1750 level was helping to set resistance: That resistance soon became support and prices have continued to trend-higher since, taking out a few big zone of resistance along the way.

The pair is now nearing a big spot on the chart, spanning form 1.1885-1.1900, after which another big zone appears around 1.1965-1.2000.

EUR/USD Four-Hour Price Chart

EURUSD Four Hour Price Chart

Chart prepared by James Stanley; EURUSD on Tradingview

GBP/USD: Wedge Break

I had looked at GBP/USD earlier this week as the pair was setting up in an ascending triangle formation. The resistance level at 1.3768 saw some considerable shake before finally breaking, which allowed for a symmetrical wedge pattern to appear.

Prices in the pair are now pushing up to a fresh two-week-high, but just ahead is a big level of resistance at 1.3879. This is the 23.6% Fibonacci retracement of the September 2020 – May 2021 major move, and this price is what marked support in early-August before showing as resistance in the middle of the month.

To learn more about the ascending triangle, check out DailyFX Education

GBP/USD Four-Hour Price Chart

GBPUSD Four Hour Price Chart

Chart prepared by James Stanley; GBPUSD on Tradingview

AUD/USD Jumps After USD Reversal: Resistance Nears

As far as major pairs, few have put in a move as clean over the past two weeks as what’s shown in AUD/USD. The pair bottomed out around the .7100 handle on August 20th, and it’s been a bee-line higher since. The 300 pips gained in AUD/USD make the 200 pip move in EUR/USD or the 220 pip move in GBP/USD look paltry by comparison.

But – if we’re in a backdrop that sees USD strength come back, helped along by a strong NFP report tomorrow, the short side of AUD/USD could come back into favor.

At this point, AUD/USD has already started to engage with a confluent batch of resistance. The level of .7406 is the 23.6% Fibonacci retracement of the May-August major move. Just above that is another Fibonacci level at .7418, and there’s also a plethora of prior price action swings in that same vicinity from July/August trade.

AUD/USD Daily Price Chart

AUDUSD Daily Price Chart

Chart prepared by James Stanley; AUDUSD 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.

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