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US Dollar Technical Forecast for Q4: Reversal Potential Remains

US Dollar Technical Forecast for Q4: Reversal Potential Remains

James Stanley, Senior Strategist

US Dollar Talking Points:

  • The US currency hit a fresh high on the first day of Q4.
  • Prices have since pulled back as driven by some negative US data.
  • DailyFX Forecasts are published on a variety of markets 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.

It’s been a tug-of-war so far in the US Dollar through 2019 but, so far, the net result has been higher prices despite the fact that the Federal Reserve has cut rates twice already. This hasn’t yet been able to offset more aggressive weakening regimes in Europe or Japan and as the US economy has held its own, at least from the perspective of inflation, markets continued to push the Greenback higher into the Q4 open. A fresh two-year-high was set on Tuesday of this week, which marked the first day of the new quarter.

For Q4, the DailyFX Technical Forecast looked at the short-side of the Greenback, anticipating a reversal after the build of a rising wedge formation over the past couple of years. While timing reversals is generally a difficult task, the fact that USD-bulls have continually shied away from fresh highs, similar to what was seen in early-August, early-September and now early-October; the onus remains on bulls to further drive to fresh highs before this formation is invalidated. This technical backdrop appears to mesh well with the fundamental outlook for the currency as the Federal Reserve simply has more room to loosen policy and, as reiterated numerous times already, the FOMC will do whatever they need to do to keep the current expansion in-place.

To get the entire forecast, as well as the rest of the DailyFX Q4 Forecasts, please click on the link below to access all of these trading guides completely free-of-charge.

The US Dollar Q4 Forecast from DailyFX

US Dollar Weekly Price Chart

Weekly US Dollar Price Chart

Chart prepared by James Stanley; US Dollar on Tradingview

To read more:

Are you looking for longer-term analysis on the U.S. Dollar? Our DailyFX Forecasts have a section for each major currency, and we also offer a plethora of resources on Gold or 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 an abundance 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

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

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