FX Price Action Setups in EURUSD, USDJPY and USDCAD
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US Dollar Tests 97.00 After ISM Report
The US Dollar drive-higher has continued after the bullish reversal that began to show last Thursday. Prices pushed up to the 97.00 area earlier this morning, at which point resistance began to set-in. This is the same level that had set the swing-high in January and even offered some short-term support in mid-February before the USD reversal began to show. That reversal ran all the way into last Thursday’s low, and it’s been largely a one-way show since. Bullish continuation strategies could continue to focus on support potential around 96.68, 96.47-96.63 and the 96.27-96.30 area on the chart.
US Dollar Four-Hour Price Chart
Chart prepared by James Stanley
EURUSD Falls Out of Rising Wedge, Begins Re-Test of Range Support
Last week, I had looked at two formations in EURUSD. On a longer-term basis, the range formation remained; but on a shorter-term look, a rising wedge pattern had built-in, which will often be approached with the aim of bearish reversals. Prices soon began to test below that rising wedge, and so far this week that move has continued as bears have made a push down to the longer-term support zone in the pair. At this stage, there’s no visible signs on shorter-term charts of a bottom being in place, so traders looking to act on that range may want to wait for a bit of confirmation first. Also of note – Thursday brings an ECB rate decision to the table.
EURUSD Eight-Hour Price Chart
Chart prepared by James Stanley
GBPUSD Bounces from ‘S3’ – Resistance Potential at Prior ‘S2’
I had looked at three different levels in GBPUSD last week and at this point, each has come into play in some shape, form or fashion. The first of those areas (1.3230-1.3250) helped to elicit a mild bounce that led into a lower-high. The second, around the 1.3187 Fibonacci level, similarly led into a bounce that built-into another lower-high. And the third of those zones came into play earlier this morning, helping to set the low (so far) for today. At this stage – the big question is whether sellers show up to offer support at that prior zone of ‘s2’ support. This can open the door for bearish continuation strategies, targeting a re-test of 1.3117.
GBPUSD Hourly Price Chart
Chart prepared by James Stanley
USDCAD Re-Tests Resistance Ahead of BoC
I had looked at bullish reversals in USDCAD last Thursday. Prices have made a fairly clean run up to a key area of resistance that runs from 1.3361-1.3385. That area has since helped to hold the highs; but there’s not yet any indication of bears entering the picture. If prices do hold this resistance zone, the door may soon open to short-side swing strategies around tomorrow’s BoC rate decision.
USDCAD Four-Hour Price Chart
Chart prepared by James Stanley
USDJPY – Doesn’t Like 112.00, At Least Not Yet
The bullish breakout in USDJPY has continued up to another fresh high. The 112.00 level was hit on Friday and after another test this morning, prices failed to hold above that price. As I had shared on the webinar, this may be a bit of short-term capitulation in that theme. This could keep the door open for support potential in the prior area of resistance that runs from 111.13-111.25.
USDJPY Four-Hour Price Chart
Chart prepared by James Stanley
USDCHF Nearing Showdown
USDCHF is rallying while trading above the parity level on the chart, eradicating the prior bearish theme in the pair that had held into last week. At this point, the sole item of interest on my charts is the resistance zone that runs from 1.0071-1.0096. A re-test in this zone, with a hold below the prior swing high, can open the door for short-side swings.
USDCHF Eight-Hour Price Chart
Chart prepared by James Stanley
AUDUSD Testing Support
Aussie has been fairly range-bound over the past month, and prices have been getting very comfortable around support of .7060-.7075. As shown on short-term charts, a descending triangle had built, which will often be approached in a bearish manner. However – given the context with the support side of that triangle near longer-term support, I instead wanted to wait for a topside breach of that formation in order to open the door for bullish strategies in the longer-term range build.
AUDUSD Hourly Price Chart
Chart prepared by James Stanley
EURJPY Tests Big Picture Resistance: Directional Change on the Horizon?
Last week, I had looked at a building bear flag formation in EURJPY. The Yen-weakness theme remained an item of excitement, and EURJPY soon touched-up to the 127.50 level that had previously helped to set range support. Since then, however, a shift has appeared to show with sellers pushing a bit more, which may be opening the door for reversal scenarios.
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.
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--- Written by James Stanley, Strategist for DailyFX.com
Contact and follow James on Twitter: @JStanleyFX
