US Dollar Talking Points:
- The US Dollar has rallied to re-test a key area of chart resistance.
- This keeps the door open for bullish USD scenarios against the CHF and AUD; while swing setups for short-USD against the GBP and CAD remain of interest.
- 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.
The US Dollar finished last week at two-month-lows with the prospect of a deeper drop holding into this week. This week’s economic calendar, however, was quite a bit more shallow than last week with only a couple of USD-drivers on the docket for the next few days. The first of those was released this morning and came out in an encouraging manner. Services ISM beat expectations, reversing the worry built by last month’s disappointment and this has helped to bring a push of USD-strength into the mix. This theme in the US Dollar may also be supported by some continued worry around the US-China ‘phase one’ trade deal, which has helped to push the S&P 500 off of those fresh all-time-highs that were set yesterday.
In this webinar, I looked at setups on either side of the US Dollar to go along with Gold, Oil and the S&P 500.
US Dollar Four-Hour Chart: USD Tests Resistance at Three-Week-Highs
Chart prepared by James Stanley; US Dollar on Tradingview
EUR/USD Falls to Three-Week-Lows, Beware Traps
Helping that outsized move of USD-strength today has been a purge in the Euro. Prices in EUR/USD have pushed down to three-week-lows, finding a bit of support at the 50% retracement of the August-October major move.
EUR/USD Four-Hour Price Chart
Chart prepared by James Stanley; EURUSD on Tradingview
GBP/USD Attempts to Build Support Base
On the short-side of the US Dollar, GBP/USD remains attractive. Even with the lurch-lower in EUR/USD and the bullish bounce in DXY, GBP/USD remains respectful of last week’s swing-lows. This can keep the door open for a re-test of the 1.2950 level, after which 1.2975 becomes of interest. If that’s taken-out, the stage is set for another test of the 1.3000 big figure.
GBP/USD Two-Hour Price Chart
Chart prepared by James Stanley; GBPUSD on Tradingview
USD/CHF: Swissy Support Bounce
I had looked at the long side of USD/CHF as a long-USD candidate coming into this week, largely based off of the recent range in the pair combined with the potential for SNB intervention if the Franc got too strong. That’s helped the pair to push up to a fresh November high. At this point, a pullback to .9902 can re-open the door for bullish trend strategies.
USD/CHF Four-Hour Price Chart
Chart prepared by James Stanley; USDCHF on Tradingview
AUD/USD Trendline Test
Also on the long side of the US Dollar, AUD/USD remains of interest. Last night brought an RBA rate decision into the mix and the bank wasn’t all that dovish, helping Aussie to strengthen after a longer-term bearish trend produced fresh decade lows in August and again in early-October. That trendline came into play again last night after the RBA but, so far, has held the highs similar to what’s shown last week and again yesterday.
AUD/USD Daily Price Chart
Chart prepared by James Stanley; AUDUSD on Tradingview
USD/CAD: Bearish Potential Remains
I had looked into USD/CAD last week and again today, focusing on the deduction between the US Dollar’s bullish move and the lower-highs produced in USD/CAD. This keeps the door open for short-side strategies in the pair.
USD/CAD Four-Hour Price Chart
Chart prepared by James Stanley; USDCAD 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
