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US Dollar Pulls Back After Resistance Test at Monthly Highs
It’s been a busy past week of price action for US Dollar bulls, as prices put in a consistent up-trend after putting in a higher-low last Thursday. Prices continued to run all the way up to the 96.68 level, which was the swing-high from January 24th. Bullish strategies in the US Dollar would be looking for a continuation of that momentum up to a re-test of the 97.00 level, which is the 2019 swing high in the currency. On the bearish side of USD, traders would likely want to see a hold below the 96.47 Fibonacci level, after a failure at the monthly high, which could open the door for swing strategies looking at a re-test down towards the 96.00 area on the charts.
US Dollar Eight-Hour Price Chart
Chart prepared by James Stanley
EUR/USD In the Middle of the Range, Can Bearish Momentum Continue?
The bearish trend looked at on Tuesday continued down to fresh near-term lows; but the three-month range remains, and it can be difficult to project a break of that range at this point until something ‘new’ happens. The 1.1400 level may be of interest, as this had offered some prior items of short-term support. Resistance showing there could be attractive for EUR/USD bears.
EUR/USD Four-Hour Price Chart
Chart prepared by James Stanley
GBP/USD Dips, Then Rips on BoE: But is the Bearish Trend Done?
This morning brought some interesting dynamics in GBP/USD. The currency initially continued its slide through the early portion of this morning’s Bank of England rate decision. Prices soon tilted down towards the subordinated support zone looked at on Tuesday and again yesterday, at which point support began to develop. As Mr. Carney noted in his press conference that ‘clarity on Brexit’ could bring upside, GBP began to rally and made a strong push up towards the 1.3000 psychological level.
At this stage, Cable bulls can look to either a) a continuation of the bounce that began this morning or b) a reemergence of the topside trend that started in early-January after a 50% retracement. On the bearish side of the coin, traders can look to the inverted hammer that printed on the four-hour chart, just underneath the 1.3000 area of resistance.
GBP/USD Four-Hour Price Chart
Chart prepared by James Stanley
USD/JPY: 110.00 Proving a Tough Space to Break for Bulls
The resistance zone in USD/JPY that runs from 109.67 up to 110.00 continues to hold the highs in the pair, and this has now been the case for two-and-a-half weeks. Most recently, a range has developed within that resistance zone, and this is something that USD/JPY bulls can look to for short-term strategies.
USD/JPY Hourly Price Chart: Range at Resistance
Chart prepared by James Stanley
On a longer-term basis, bulls can look to the building ascending triangle formation, as that 110.00 level has brought a diminishing impact the longer it’s been tested; with a topside breakout beyond resistance re-opening the door for bullish themes. For USD/JPY bears, a hold of this resistance keeps the door open for short-side swing trades.
USD/JPY Eight-Hour Price Chart
Chart prepared by James Stanley
USD/CAD Surge from Support, Levels of Interest on Either Side
The past week has brought a very strong US Dollar to go along with lower Oil prices, and this has shown quite visibly in USDCAD’s topside rip. The difficult part of working with the pair at the moment is one of price position. A bit higher is a resistance area of note that runs from 1.3361-1.3385. Potential support exists at 1.3236-1.3259 and a bit-lower around the 1.3132 Fibonacci level.
USD/CAD Four-Hour Price Chart
Chart prepared by James Stanley
AUD/USD Breaks Down on Lowe Flip
AUDUSD put in a support bounce on the heels of Monday night’s RBA rate decision, jumping from a key area on the chart up to a trend-line resistance, as taken from January and February swing-highs. The following day, however, saw a different tone (or was at least perceived by markets as such) from Dr. Phillip Lowe, the head of the RBA. Dr. Lowe mentioned the possibility of lower rates in Australia which comes in contrast to the statement from the Monday night rate decision. In short order, bears had returned, and prices have been moving lower ever since. At this point, support appears to have started to build in; but this can be a difficult backdrop for bulls as each move-higher, at this point, has been met by sellers. On the short side, the quandary would be one of risk-reward, as nearby supports could limit possible potential for bearish approaches.
AUD/USD Hourly Price Chart
Chart prepared by James Stanley
EUR/JPY Resistance Potential Around 125.00
The year started in a very bearish manner for EUR/JPY as the pair plunged below the 119.00 level on January 2nd. But since then – prices spent the bulk of the time trending higher in a rather consistent fashion. But as Euro weakness has started to show up again, EUR/JPY has begun to slide, begging the question as to whether that big picture down-trend might be on its way back. For those looking at short side stances in EUR/JPY, or perhaps even for those looking for an FX pair to utilize for risk off themes, resistance showing at the 125.00 level could open the door for short-side strategies in the pair.
EURJPY Two-Hour Price Chart
Chart prepared by James Stanley
To read more:
Are you looking for longer-term analysis on the U.S. Dollar? Our DailyFX Forecasts for Q4 have a section for each major currency, and we also offer a plethora of resources on 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
