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.

Free Trading Guides
EUR/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bearish
Wall Street
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
GBP/USD
Bullish
USD/JPY
Bearish
More View more
Real Time News
  • President Trump says we're going to go through a very tough two weeks #coronavirus
  • $EURUSD Daily Pivot Points: S3: 1.0862 S2: 1.0958 S1: 1.1002 R1: 1.1099 R2: 1.1151 R3: 1.1247 https://www.dailyfx.com/pivot-points?ref=SubNav?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • #DAX: Bulls have been unable to break above resistance derived from the December 2018 lows. Get your DAX market update from @PeterHanksFX here: https://t.co/dnJxJVLIOD https://t.co/X6wF8UKN87
  • 🇦🇺 AUD AiG Performance of Manufacturing Index (MAR), Actual: 53.7 Expected: N/A Previous: 44.3 https://www.dailyfx.com/economic-calendar#2020-03-31
  • #SP500 futures struggling here at "outer" resistance in the aftermath of taking out "inner" resistance (as expected). A descent through near-term rising support (blue line) could pave the way for a retest of current 2020 lows. Taking out 2634 may otherwise precede further gains https://t.co/y4LtFwPodU
  • $USDJPY Daily Pivot Points: S3: 105.89 S2: 106.85 S1: 107.35 R1: 108.31 R2: 108.79 R3: 109.76 https://www.dailyfx.com/pivot-points?ref=SubNav?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • Heads Up:🇦🇺 AUD AiG Performance of Manufacturing Index (MAR) due at 21:30 GMT (15min), Actual: N/A Expected: N/A Previous: 44.3 https://www.dailyfx.com/economic-calendar#2020-03-31
  • Here is the $SPX overlaid with the Fed's balance sheet (correct chart). That latest round of stimulus shows up pretty clearly.... https://t.co/NsSfoe2PEp
  • Here is the $SPX overlaid with the Fed's balance sheet. That latest round of stimulus shows up pretty clearly.... https://t.co/mniwCu6l6Z
  • Just got this emergency notification. Still think the #coronavirus curve is flattening? https://t.co/4ETpxTH7SJ
US DOLLAR Technical Analysis: Let The USD Pain Trade Begin?

US DOLLAR Technical Analysis: Let The USD Pain Trade Begin?

2016-06-27 16:40:00
Tyler Yell, CMT, Currency Strategist
Share:

Talking Points:

  • US Dollar Technical Strategy: A High-Low + Breakout = USD Bull Return
  • Aggressive Break Above 12,000 Favors a Resumption of the Pain Trade
  • Are You Ready To Watch Another Opening Range Breakout?

Since February, it appears that central banks have been interested in keeping down the value of the US dollar. The fear and no uncertain words were whether or not the market would take back the US dollar’s market value from the Central Banks and most notably the Fed. After the EU referendum outcome had shown the United Kingdom would be parting ways with the world’s largest single market in the euro zone, fear sent money out of sterling and other risk assets and into risk off currencies and the US Dollar.

Given the technical picture on the charts, we recently printed a higher low that causes one to wonder whether we just saw a triple-bottom that could now see a significant reversal in the works. Below, we will share some the building blocks of a US dollar breakout as well as what levels to watch, and what other markets could complement such a strong move.

Either way, much of the market environment over the last few months has been built on a weak US Dollar so a reversal could put further pressure on risk assets like commodities and stocks if a true dollar breakout is in the works.

The Fundamentals And Technical Picture May Be Aligning to US Dollar Strength

US DOLLAR Technical Analysis: Let The USD Pain Trade Begin?

The chart above shows how aggressive the move lower has been since post-Brexit. In two days, we’ve taken out for months of corrective price action that could signal a new and aggressive bull market is underway in the US dollar.

We have long discussed the importance of the 12,000 level on the chart, and the recent break of this level off of the price range of the May 2015 low suggests the potential triple bottom price action pattern. If this pattern is playing out, we would expect an equal move the size of the range above the recent 2016 high of 12,306.

US DOLLAR Technical Analysis: Let The USD Pain Trade Begin?

The Bearish channel (red) has done a fine job of framing price action. When combining the bearish price channel with the 200-Day Moving Average (12,025), you can begin to see that we are still in a corrective price channel in the setback may soon occur, but overall the strength of the move and resistance should favor the Bulls.

To receive Tyler’s analysis directly via email, please SIGN UP HERE

June Support & Resistance Levels As of June 27, 2016

Friday’s move broke above resistance at the opening range high is 11,998. This level was a clean bracket to sentiment as the key resistance we’ve been watching (highlighted on the chart above) is the 12,000 zone where many pivots have occurred since topping out in late January.

We’ve warned that even a dire fundamental picture in the US regarding expected interest rate hikes (a fundamental driver of currency strength) could be swept aside with a break above the 12,000 zone. Now that this has happened, attention should be focused on further US Dollar upside.

Now, it is worth watching the opening range of July, which is also the opening range for the second half of 2016 to see if dollar strength extends. If so, we could be looking at market stresses similar to late 2008 and the uncomfortable ripple effects to follow. Only this time, most central banks have only a few bullets in the gun if any, which could bring up the dollar strength even more.

Shorter-Term US Dollar Technical Levels for Monday, June 27, 2016

For those interested in shorter-term levels of focus than the ones above, these levels signal important potential pivot levels over the next 48-hours of trading.

As a special warning, the EU referendum promises to bring volatility across the board. It is expected that markets could be illiquid as people shy away from the risks that bring with it volatility. Therefore, the diagram below has wider levels than usual to adjust to possible illiquid and volatile markets.

US DOLLAR Technical Analysis: Let The USD Pain Trade Begin?

Interested In our Analyst’s Longer-Term Dollar Outlook? Please sign up for our free dollar guide here.

T.Y.

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

DISCLOSURES

News & Analysis at your fingertips.