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US Dollar Price Action Setups: EUR/USD, USD/CAD, USD/CHF, GBP/USD

US Dollar Price Action Setups: EUR/USD, USD/CAD, USD/CHF, GBP/USD

2019-09-05 19:03:00
James Stanley, Currency Strategist
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US Dollar, EUR/USD, GBP/USD, USD/CAD, AUD/USD Talking Points:

  • The US Dollar has had a riveting start to September trade, initially breaking out to the upside amidst a low-liquidity backdrop, followed by a vicious reversal from Tuesday as US traders returned to their desks after a long weekend.
  • Tomorrow brings NFP, next week ECB and the week after brings the FOMC. Buckle up.
  • 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.

Tomorrow brings Non-Farm Payrolls out of the United States, and that leads into a couple of key Central Bank rate decisions on the calendar over the next couple of weeks. Next Thursday brings the European Central Bank’s September rate decision, and the week after brings the FOMC.

Around the Fed, expectations for cuts have been softening of recent, helped by this morning’s beat in non-Manufacturing ISM. This came out at 56.4 v/s an expectation of 54, and this helped to offset some of the fear that came-in on Tuesday around the Manufacturing ISM miss, which saw that indicator print at its lowest level in more than three years. And given the moves in the US Dollar this week, its apparent that near-term data has quite a bit of pull here, highlighting the importance of tomorrow’s NFP report.

In the US Dollar, the currency has snapped back from this morning’s lows to find a bit of resistance in a key area on the chart that runs from 98.33-98.50. This is the same zone that offered resistance in the second-half of August, along with swing-highs in April and May. On the support side of DXY, a confluent zone of Fibonacci levels lurks from 97.86-97.94, and below that, the prior yearly high of 97.70. Each of those support areas could be near-term targets for short-side setups.

US Dollar Four-Hour Price Chart

us dollar price chart

Chart prepared by James Stanley; US Dollar on Tradingview

USD/CAD Reversal After Bank of Canada

Yesterday brought CAD strength into the mix, helping to illicit a strong reaction in USD/CAD after prices had found resistance in a key zone on the chart. This morning’s return of USD strength has volleyed USD/CAD back up to resistance at a prior area of support, around the 1.3250 psychological level, and this can keep the door open for bearish strategies in the pair.

USD/CAD Four-Hour Price Chart

usdcad price chart

Chart prepared by James Stanley; USDCAD on Tradingview

USD/CHF: Pullback to Support at 98.00

On the long side of the US Dollar, USD/CHF remains of interest. I started looking at the bullish side of the pair a couple of weeks ago and, since then, buyers have continued to press. At this point, a pullback to short-term support around the .9850 level can reopen the door for topside strategies in the pair.

USD/CHF Two-Hour Price Chart

usdchf two hour price chart

Chart prepared by James Stanley; USDCHF on Tradingview

EUR/USD: Can Cut Both Ways Ahead of ECB

A nasty bear trap showed in EUR/USD around the Labor Day holiday, with prices finally breaking below 1.1000 in EUR/USD in low-liquidity conditions. But, as US traders returned to their desks on Tuesday, the entirety of that move, and then some, was quickly erased. At this point, the pair could be justified in either direction. Short-term, the door can remain open for bullish continuation scenarios but, on a longer-term basis, the short-side appears more attractive given a hold of resistance around a prior support level taken from around 1.1075.

EUR/USD Daily Price Chart

eurusd price chart

Chart prepared by James Stanley; EURUSD on Tradingview

GBP/USD: Cable Rallies to Fresh Monthly High

I’ve been following the long side of GBP/USD for the past few weeks and that setup has finally come to life. On a longer-term technical basis, a key trend-line came into play in early-August that helped to hold the lows throughout the month. And after a quick rush of weakness to start September, prices have reversed and put in a very visible rally. This can keep the pair attractive on the long side, particularly for strategies based around a continuation of US Dollar weakness.

GBP/USD Monthly Price Chart

gbpusd monthly price chart

Chart prepared by James Stanley; GBPUSD on Tradingview

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

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

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