Skip to content
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
Strategy Around a Coagulated U.S. Dollar

Strategy Around a Coagulated U.S. Dollar

James Stanley, Senior Strategist

If you’re looking for trading ideas, check out our Trading Guides. If you’re looking for ideas more short-term in nature, please check out our Speculative Sentiment Index Indicator (SSI).

Talking Points:

- U.S. Dollar price action has moved from previously smooth & strong trends (bullish in November/December, bearish in January, bullish again first half of February) into what has been rather messy; and in today’s webinar we look at how this week’s drivers priced-in to the Greenback.

- After Tuesday’s testimony from Fed Chair Janet Yellen as day one of her twice-annual Humphrey-Hawkins testimony, the Dollar had run aggressively-higher as near-term rate expectations were shooting higher. As we looked at in Tuesday’s webinar, we wanted to see a sustained break in DXY above the 101.53 level in order to move-forward with bullish strategies.

- Just ahead of day two of that testimony yesterday, U.S. CPI came-out at .6% for January versus the expectation of .3%; a healthy beat that further denotes recovery in the U.S. economy which could, potentially, bring on a rate hike ‘sooner rather than later’. This drove DXY above that 101.53 level, albeit briefly, before another major reversal began in USD.

- USD price action since Chair Yellen’s second day of testimony has been bearish, and this alludes to the fact that the longer-term bullish up-trend may not yet be ready for resumption, and given the ~month until the next FOMC meeting in March, we may see fresh lows in the Greenback before that bullish trend is ready to resume. Nonetheless, there is a very interesting support zone to evaluate in the range between 100-100.50 on DXY in the effort of longer-term trend-continuation prospects.

- In the effort of longer-term USD exposure, we looked at two different setups in USD/JPY and USD/CAD. USD/JPY has a very interesting batch of support in the ~80-pip range between 111.61 and 112.40. Support in this region could be very interesting: USD/CAD has seen quite a bit of support around the 1.3000 level, and that, too, can be interesting for bullish-Dollar plays.

- We then moved over to look at a reversal setup in AUD/JPY, after a fresh high above a confluent batch of resistance was met with a bearish engulfing pattern (today’s daily).

- We then looked at the other side of the Yen with a long GBP/JPY setup, utilizing the level of support around 141.00.

--- Written by James Stanley, Analyst for DailyFX.com

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

Contact and follow James on Twitter: @JStanleyFX

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

DISCLOSURES