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US Dollar Price Action Setups: EUR/USD, GBP/USD, USD/JPY, NZD/USD

US Dollar Price Action Setups: EUR/USD, GBP/USD, USD/JPY, NZD/USD

2019-10-17 19:00:00
James Stanley, Currency Strategist
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US Dollar Price Action Talking Points:

  • The US Dollar continues lower in the Q4 pullback theme, currently testing support in the rising wedge formation.
  • Significant strength has shown in both EUR/USD and GBP/USD as Brexit progress has shown. But this theme is far from over.
  • 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 Q4 Pullback Continues

The Q4 pullback in the US Dollar has continued as the USD put in a push earlier this morning down to fresh two-and-a-half month lows. This has come along with some notable moves of strength in both EUR/USD and GBP/USD as progress has begun to show in the ongoing Brexit scenario. Nothing is done yet, however, as that deal must pass through the House of Commons in a vote this weekend, thereby setting up for an environment of continued volatility in both pairs.

In this webinar, I looked at setups around the US Dollar to go along with looks at both Gold and Oil later in the session.

US Dollar Breaks Down to Fresh Two-Year-Lows, Tests Wedge Support

First off the long-term chart: Prices are currently testing the support side of a rising wedge formation after a rather aggressive sell-off in the first couple of weeks of Q4. As discussed in the webinar, this scenario may need a bit of pullback before longer-term USD bears can continue pushing down to even fresher lower-lows.

US Dollar Daily Price Chart

us dollar daily price chart

Chart prepared by James Stanley; US Dollar on Tradingview

On a shorter-term basis, lower-high resistance potential remains off of the prior point of resistance found around 97.70, which had provided the swing-highs in DXY in November and December of 2018 along with March and June of 2019. A bit-higher brings the zone of Fibonacci levels from 97.86-97.94.

US Dollar Daily Price Chart

us dollar daily price chart

Chart prepared by James Stanley; US Dollar on Tradingview

EUR/USD Breaks Out

In our last webinar we looked at a ‘nexus’ of confluence in EUR/USD, coming from both a bearish trend-line projection as well as the support side of a bear flag formation. That support check around the 1.1000 level led into a pronounced bullish move and prices in the pair are now perking up to fresh monthly highs.

EUR/USD Four-Hour Price Chart

eurusd eur/usd four hour price chart

Chart prepared by James Stanley; EURUSD on Tradingview

GBP/USD: Cable Jumps on Brexit Dynamics, Nothing is Finished Yet

I’ve been following the long side of GBP/USD, looking for re-entry as recently as Tuesday from a key zone of support around prior resistance. And while that filled-in well, price action has been erratic over the past two days thereby producing problems from a risk management perspective.

GBP/USD Four-Hour Price Chart

gbpusd gbp/usd four hour price chart

Chart prepared by James Stanley; GBPUSD on Tradingview

USD/JPY: Attractive for USD-Strength/Recovery Scenarios

As followed over the past two weeks, USD/JPY remains attractive for long-USD scenarios. This is supported by the fact that the pair remains so close to recently fresh two-month-highs even as the US Dollar dips down to fresh monthly lows.

At this point, price action in USD/JPY is testing support at prior resistance from the area on the chart investigated for as such on Tuesday.

USD/JPY Four-Hour Price Chart

usdjpy price chart

Chart prepared by James Stanley; USDJPY on Tradingview

NZD/USD Tests Range Resistance

I’ve been following the short side of AUD/USD for USD-strength scenarios but as looked at in the webinar that theme no longer looks very attractive. On the other hand, NZD/USD has put in a more subdued bullish move as this USD-weakness has priced-in, and prices in the pair are currently testing resistance around prior October swing highs, keeping the door open for range strategies as one of the possible manners of incorporating USD-strength.

NZD/USD Four-Hour Price Chart

nzdusd nzd/usd price chart

Chart prepared by James Stanley; NZDUSD 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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