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US Dollar, EUR/USD, GBP/USD, USD/CAD, USD/JPY Talking Points:

  • The US Dollar has bounced today after yesterday’s sell-off, alluding to the ‘cleanest shirt in the dirty laundry’ theme that’s been alluded to by our own Nick Cawley around the USD.
  • This sets up for an interesting backdrop across a variety of markets that were looked at in this live webinar.
  • DailyFX Forecasts are published on a variety of markets such as Gold, the US Dollar or the Euro and are available from the DailyFX Trading Guides page. If you’re looking to improve your trading approach, check out Traits of Successful Traders. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide.

US Dollar Bounces After Powell’s Dovish Push

The US Dollar put in a push of weakness around yesterday’s comments from FOMC Chair, Jerome Powell. Global markets are geared-up for a rate cut out of the Fed later this month and even more softening later in the year. But, the big question at this point is the same as it was around the June rate decision at the FOMC, which is – will the Fed deliver?

In yesterday’s remarks, Chair Powell sounded dovish. In June, the bank had even alluded to the possibility of a rate cut in the second-half of this year. But, at this point, rates markets are looking for at least three cuts (with a greater than 50% probability of as such per CME Fedwatch) by the end of 2019 and the Fed hasn’t appeared to be that dovish at all. So, this sets up the US Dollar for continued volatility as the July rate decision approaches in a few short weeks. In this webinar, I looked at setups on either side of the Greenback.

US Dollar Fills Gap, Builds Doji from Support at Prior Resistance

This one can cut either way, which explains the diverse approach across the below pairs. On the resistance side, the 97.70-97.87 area looms large just above current price action; and on the support side of the matter, the 95.86-96.04 zone would be the next area of attraction for sellers to test.

US Dollar Daily Price Chart

us dollar usd daily price chart

Chart prepared by James Stanley

EURUSD Bounce from Support, Attempts to Build Short-Term Bullish Trend

The support zone looked at on Tuesday helped to hold the lows in the pair ahead of yesterday’s Powell comments. This helped EURUSD to incline back-above the 1.1250-1.1265 zone on the chart and, from a short-term basis, it looks as though bulls may be trying to come back-in to pose another topside push in the pair. This keeps EURUSD as an option for short-side USD themes, looking for a continuation of the short-squeeze that ran through most of the month of June.

EUR/USD Four-Hour Price Chart

eur usd four hour price chart

Chart prepared by James Stanley

GBPUSD Bounces From Flash Crash Lows, Finds Trendline Resistance

On the long side of the US Dollar, GBPUSD remains of interest. The pair pushed down for a re-test of the early-year flash crash lows to start this week. Yesterday’s push of USD-weakness helped to elicit a bounce, and that bounce ran all the way up for a re-test on the under-side of a prior bullish trendline. As discussed in the webinar, there is a backdrop for continued weakness here, looking for a short-term bounce around the 1.2500 level up towards the Fibonacci level around 1.2523.

GBPUSD Four-Hour Price Chart

gbpusd gbp/usd four hour price chart

Chart prepared by James Stanley

USDJPY Re-Tests Resistance Zone

USD/JPY may have continued scope for retracement; but a big zone is currently in play and if this holds, the short-side of the pair can remain as attractive. This runs from the same zone that held the highs in the pair throughout the month of June, and has since come back into play after yesterday’s bearish move pushed all the way down for a support test around 108.00.

USDJPY Four-Hour Price Chart

usdjpy four hour price chart

Chart prepared by James Stanley

USDCAD Digs into Support: Squeeze on the Way?

I’ve been following the short side of USDCAD for some time now, largely looking to capitalize on a strong Canadian Dollar to go along with a weak US Dollar. But, the past couple of days have produced a backdrop that may be highlighting squeeze potential. Yesterday’s US Dollar weakness brought a higher-low in the pair, and the proximity to 1.3000 may be at least partially to blame as the down-trend in the pair has been quite visible over the past few weeks. As discussed in the webinar, a push up to 1.3200 or perhaps even as deep as 1.3250-1.3300 could re-open the door for short-side setups; but, for now, it appears the pair is poised to bounce.

USDCAD Four-Hour Price Chart

usdcad four hour price chart

Chart prepared by James Stanley

Gold Prices Narrow into Bull Pennant

I had written about this Gold setup earlier today, and yesterday’s push of USD-weakness allowed for another bullish bounce in Gold prices. However, noticeable was the fact that price action put in yet another lower-high with bulls getting shy around the 1420 area on the chart. This highlights the build of a symmetrical wedge pattern atop last month’s bullish trend, and this could allow for bullish biases to remain. As discussed this morning, that places emphasis around the 1400 psychological level, which is confluent with the 23.6% retracement of that recent major move. Longer-term support potential remains around 38.2 and 50% markers, as well, which each of those prices showing an element of confluence with additional supports.

Gold Price Four-Hour Chart

gold 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 have a section for each major currency, and we also offer a plethora of resources on Gold or 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