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US Dollar Closing in on Key Support, EUR/USD Nears Resistance Hurdles

US Dollar Closing in on Key Support, EUR/USD Nears Resistance Hurdles

James Stanley, Senior Strategist

US Dollar, EUR/USD Price Analysis:

  • In this webinar, I looked at a series of USD-setups in pairs like EUR/USD, USD/CAD, GBP/USD and AUD/USD; along with markets such as the S&P 500, Gold and Oil.
  • The US Dollar is tip-toeing down towards a key area of support, the same that had come into play a month ago in helping to set the June low.
  • Can USD bears make a break-away? The answer to that might be at least somewhat contained in EUR/USD, which is nearing its own key area on the chart. Oh and there’s an ECB rate decision on Thursday following a BoC rate decision on tomorrow’s economic calendar.

US Dollar Price Action Setups

We’re now two weeks into Q3 and there’s potential for a USD trend. The US Dollar has been in a fairly consistent sell-off since the page has turned into July. Big picture, this doesn’t yet eliminate the range that’s been in-play on the Greenback for the past month and change; but it does represent some interesting potential as a number of market themes have come into question of recent. That trend is on full display in the two-hour chart below.

US Dollar Two-Hour Price Chart

US Dollar Two-Hour Price Chart

Chart prepared by James Stanley; USD, DXY on Tradingview

US Dollar Bigger Picture

Taking a step back and a key area of support comes into view. This is a confluent area on the chart, with 50% retracements from two long-term major trends in close proximity: At 95.86 is the 50% marker of the 2001-2008 major move, and at 96.05 is the half-way point of the 2017-2018 bullish move.

Perhaps more importantly than the theoretical is the actual: This support zone stopped a concerted bearish trend dead in its tracks just a month ago. Will sellers see a different fate upon another support test at this key area on the chart?

US Dollar Four-Hour Price Chart

US Dollar Four-Hour Price Chart

Chart prepared by James Stanley; USD, DXY on Tradingview

EUR/USD Nears Resistance Hurdle – ECB on Deck

There’s an ECB rate decision this Thursday and EUR/USD is brewing around a very interesting area on the chart. There’s a long-term zone of resistance just overhead, running from the approximate 1.1448-1.1500. This is the same zone that caught the highs in March after helping to set support in 2018 and resistance last year.

The June run in the pair stopped short before a test in this area, as possible indication of bull’s unwillingness to support the bid near that key zone of resistance. The big question – will ECB change anything?

The answer to whether the Euro can break above this area is likely related to the above matter in the US Dollar and whether USD can break below the 95.86-96.05 support zone.

EUR/USD Daily Price Chart

EURUSD Daily Price Chart

Chart prepared by James Stanley; EUR/USD on Tradingview

USD/CAD Remains in Range Ahead of BoC

Tomorrow brings a Bank of Canada rate decision and the big question here is whether the bank can push the pair out of its current range. After a riveting first quarter of this year, the pair has more recently shown a proclivity to range. I had written an article on the topic a little earlier, entitled Canadian Dollar Price Analysis: USD/CAD Range Remains for Now.

There may be a workable short-term theme within this range, as discussed in the above article.

USD/CAD Four-Hour Price Chart

US Dollar Closing in on Key Support, EUR/USD Nears Resistance Hurdles

Chart prepared by James Stanley; USD/CAD on Tradingview

--- 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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