FX Price Action Setups Around the US Dollar
FX Price Action Talking Points:
- The US Dollar has so far held the pullback theme through Q4 trade, but a bullish trendline is now coming into play.
- This can keep long-USD scenarios as attractive in USD/JPY or, perhaps even AUD/USD. Meanwhile USD-weakness has been on full display in GBP/USD and may remain as attractive in USD/CAD, as well. Gold may soon become attractive again for USD-weakness, as looked at yesterday.
- 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 Pullback Finds Near-Term Trendline Support
We’re now at the halfway point in the first month of Q4 and a number of interesting price action setups are showing across global markets. So far in Q4 the US Dollar has continued to pullback from the fresh two-year-highs that were set on the first day of the quarter. This speaks to the longer-term rising wedge formation that’s been building throughout this year as buyers have continued to slow their enthusiasm at-or-around highs while remaining fairly aggressive around support. This was the key component of the Q4 Technical Forecast for the US Dollar as part of the DailyFX Trading Guides.
US Dollar Weekly Price Chart
On a shorter-term basis, that Q4 pullback in the US Dollar is now testing some key areas of support on the chart as taken from a bullish trendline. This was discussed earlier this morning and the scenario remains in-play later in the session.
US Dollar Daily Price Chart
EUR/USD: Tests the ‘Nexus’ from Bullish/Bearish Scenarios
I spoke at length about the EUR/USD pair in the webinar. Price action is testing the support side of a bear flag formation. That also lines up with support at prior resistance, taken from around the 1.1000 psychological level.
EUR/USD Eight Hour Price Chart
GBP/USD: Blast Off on Brexit Hopes
It’s been a strong bullish jump in the British Pound today as driven by headlines around Brexit. The breakout looked at in this morning’s article has already cleared through the first target. I’ve been following the long side of the pair for a while now as one of the more attractive ways to work with USD-weakness. And despite the USD’s hold around trendline support, GBP/USD has pushed up to fresh four-month-highs as driven by hopes around Brexit. In the webinar, I shared strategy for re-entry and/or bullish continuation scenarios in Cable.
GBP/USD Eight-Hour Price Chart
USD/JPY Breaks Out to Fresh Two-Month-Highs
I began looking at the long side of USD/JPY last week as one of the more attractive venues for USD-strength scenarios. This was largely furnished by the Yen-weakness scenario that has largely remained as a bright spot across major fx currencies. This theme has held and USD/JPY has pushed above a key zone of resistance on the chart from 108.47-108.70.
That prior zone of resistance now becomes support potential in bullish continuation strategies on the pair.
USD/JPY Four-Hour Price Chart
AUD/USD Remains Attractive for Long-USD Scenarios
Also of interest for bullish USD exposure is the longer-term backdrop around AUD/USD. With the US Dollar holding at trendline support, this can be an attractive theme in the near-term for long-USD scenarios without having to chase a fresh breakout such as in USD/JPY.
AUD/USD Eight-Hour Price Chart
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.