US Dollar Talking Points:
- The US Dollar has taken a bearish turn to kick off December, going along with US equities and Treasury Yields.
- This sets up a variety of interesting setups that were covered in this webinar. Below I look at a few of the more popular markets discussed.
- 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.
US Dollar Drops to Start December Trade
It’s been a quick start to December as all of the US Dollar, US equities and US Treasury rates have been falling lower to kick off the final month of 2019. In the US Dollar, weakness has been around for a bit as Q4 marked a reversal in the prior bullish trend. The month of October was especially bearish for the USD as price action fell below a rising wedge formation. The first-half of November saw a 50% pullback and a key zone of resistance helped to hold the highs mid-month, coming back into play a couple of weeks later and holding into the December open.
Already USD bears have made a mark but, as discussed in this webinar, the big quandary at the moment is one of short-side continuation and relevant counterparties to set up for bearish US Dollar scenarios.
US Dollar Four-Hour Price Chart
Chart prepared by James Stanley; US Dollar on Tradingview
EUR/USD Tests Confluent Resistance
EUR/USD bounced from the support zone looked at last week and is right back at resistance around the late-November swing highs. This keeps the door open for short-side swings until the 1.1100 level is taken out.
EUR/USD Four-Hour Price Chart
Chart prepared by James Stanley; EURUSD on Tradingview
GBP/USD Tests 1.3000 but Can Bulls Hold the Line?
GBP/USD has been one of my favored candidates for short-side USD scenarios over the past few months, and a big psychological level just came back into play on the pair at the 1.3000 price. This can constrain bullish advances, at least for now, as prices are trading heavy above the big figure. This does however open the door for higher-low support plays off of levels like 1.2950.
GBP/USD Two-Hour Price Chart
Chart prepared by James Stanley; GBPUSD on Tradingview
Gold Breaks Out, Finds Resistance at 1480
I had looked into Gold yesterday with the potential for a bullish scenario should buyers press the matter, and that’s what’s happened since then as Gold price action has pushed up for a re-test of the 1480 level. This opens the door for higher low support potential at either of 1475 and/or 1466 for bullish plays.
Gold Four-Hour Price Chart
Chart prepared by James Stanley; Gold on Tradingview
USD/CAD Ahead of BoC
The Canadian Dollar has been very weak over the past few trading days, so much so that the bearish move in DXY doesn’t really show on the USD/CAD chart. But, tomorrow brings a Bank of Canada rate decision that could change matters very quickly. At this point, a series of resistance levels sit overhead and this could make the long side of the pair as unattractive and, deductively, this could start to open the door for short-side scenarios should tomorrow’s rate decision help to push in CAD-strength.
USD/CAD Eight-Hour Price Chart
Chart prepared by James Stanley; USDCAD on Tradingview
USD/CHF Range Potential
Of interest on the long side of the US Dollar is a potential range setup in USD/CHF. USD/CHF has been in a range-bound formation for the entirety of Q4 at this point and there’s little evidence to yet suggest that its nearing an end. With prices pushing down towards support in the .9823-.9850 area on the charts, the door can soon be re-opened to bullish mean reversion scenarios.
USD/CHF Four-Hour Price Chart
Chart prepared by James Stanley; USDCHF 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
