FX Price Action Setups Around the US Dollar: AUD/USD, GBP/USD
FX Price Action Talking Points:
- The US Dollar has put in another resistance test at the 97.86-97.94 zone.
- This keeps the door open for USD-weakness, with a couple of candidates attractive for possible scenarios of USD-strength, such as USD/JPY and/or AUD/USD.
- DailyFX Forecasts are published on a variety of markets such asthe US Dollar or the Euro and are available from the DailyFX Trading Guides page.
The US Dollar is back to resistance at the same zone that held the highs in late-October, including around the FOMC rate decision when Jerome Powell said that the bank wouldn’t be looking to hike rates until a ‘really significant’ increase in inflation. Thickening the drama is the current backdrop around the USD, in which a bearish trend showed in the month of October followed by a 50% support bounce in early-November. I had looked into the matter earlier this morning in the article entitled, US Dollar, EUR/USD Test Key Resistance Hurdles on the Chart.
That resistance remains in play and as I shared on the webinar, this helps to keep the door open to short-side scenarios in the currency. Nonetheless, there are a couple of pockets of potential opportunity for USD-strength, which were investigated, as well.
US Dollar Four-Hour Price Chart
EUR/USD Bounce from 1.1000 into Resistance at Prior Support
I looked at EUR/USD from the perspective of short-side swings. I had discussed the current zone of resistance earlier this morning. That resistance has since held but buyers are getting increasingly more aggressive, leading to a short-term ascending triangle. Such formations will often be approached in a bullish manner, so this could allow for a quick breakout up to the 1.1100-1.1110, at which point short-side swings could come back into order.
EUR/USD Hourly Price Chart
GBP/USD for USD-Weakness
In GBP/USD (Cable), the 1.3000 level looms large and this could complicate top-end profit targets at the moment. I had discussed this pair a little earlier today looking at bullish continuation potential, and two support zones remain of interest: The area around the 1.2900 handle and, a bit deeper, the same Fibonacci level that was used last week for similar purposes.
GBP/USD Two-Hour Price Chart
USD/CAD Topping Potential for Short-Side Swings
This setup was in view during the webinar as price action was bursting up towards the prior swing-high at 1.3270. As I had shared, a hold of resistance inside of that high kept the door open for short-side swings, and that test continues as I write this article. A break above the high makes short-side swings less attractive, with deeper resistance potential around the 1.3300 marker.
USD/CAD Two-Hour Price Chart
AUD/USD for USD-Strength
I’ve been following the Aussie for scenarios of USD-strength, and that setup ran fairly well last week. Price action is in the current midst of a retracement, keeping the door open for bearish setups in the pair.
AUD/USD Four-Hour Price Chart
USD/JPY Support Test
USD/JPY Hourly Price Chart
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--- 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.