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Trading Around the U.S. Dollar (Sept. 28, 2017)

Trading Around the U.S. Dollar (Sept. 28, 2017)

2017-09-28 19:30:00
James Stanley, Strategist
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- This is one of the many DailyFX webinars that we host each week, most of which are completely free to all traders. If you’d like to attend this event in the future, or if you’d like to find another of our webinars that may fit your trading style even better, please check out our DailyFX Webinar calendar to find the best session for you.

- In this webinar, we used price action to look at macro markets after a rather busy few weeks in the FX-space.

- The first market we looked at was the U.S. Dollar, as the 2017 down-trend ran into a string of gains over the past week. Those gains pushed prices into an interesting point of resistance, off the mid-line of a bearish channel; and since then we’ve seen sellers pushing prices-lower. This opens the door for short-side continuation, and as long as DXY remains below the 94.08-94.30 resistance area, the bearish theme can remain as attractive.

- On that bearish theme, the topside of EUR/USD can remain as attractive. The pair is working with an interesting zone of support that we looked at quite a few times over the past couple of weeks, and after first interacting with that zone, buyers have begun to show-up to push prices higher. This can open the door for bullish exposure in the pair.

- We’ve also been following GBP/USD for short-USD exposure. The British Pound put in a significant topside pop after the Bank of England rate decision earlier in the month. In the immediate aftermath, we saw numerous tests of higher-low support at the Fibonacci level of 1.3478; but this eventually gave way as sellers pushed prices-lower. In our technical article on the pair, we were following support zones around 1.3350 and 1.3250; and at this point we’ve seen buyers respond to support at the 1.3350. On short-term charts, there’s a batch of resistance that runs from 1.3450-1.3478 that could make the bullish setup considerably more attractive should buyers show a willingness to take this out.

- On the long-USD side of the coin, we looked at USD/JPY which is sitting at an interesting support level of 112.43. This is the top-end of a resistance zone that’s been in-play for much of the year, and after prices tested the 113.00 level yesterday, we’ve seen higher-low support begin to show around this prior point of resistance. This can open the door for bullish exposure in the pair.

- Also on the long-USD side, we have potential short exposure in AUD/USD. After Phillip Lowe’s speech last Thursday, Aussie has had a difficult time mustering buyers or demand, and prices just sank down to set a fresh low. There’s a resistance zone currently sitting above price that runs from .7929-.7946; and a revisit here can open the door to short-side exposure.

- We also looked at USD/CAD, which appears to be in the midst of a corrective move after a really aggressive bearish trend. Prices are currently breaking above a bullish channel that’s part of a longer-term bear flag formation, and this gives the appearance of deeper retracement potential before the bigger-picture bearish trend is ready for resumption.

- We lastly looked at GBP/JPY and EUR/JPY. My preference would be EUR/JPY at the moment, and I published an Analyst Pick on that setup yesterday.

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

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