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

Chart prepared by James Stanley; US Dollar on Tradingview

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

Chart prepared by James Stanley; EURUSD on Tradingview

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

Chart prepared by James Stanley; GBPUSD on Tradingview

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

Chart prepared by James Stanley; USDCAD on Tradingview

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

Chart prepared by James Stanley; AUDUSD on Tradingview

USD/JPY Support Test

USD/JPY is testing a key Fibonacci level at 108.47, keeping the door open for topside swing potential.

USD/JPY Hourly Price Chart

Chart prepared by James Stanley; USDJPY on Tradingview

To read more:

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