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US Dollar Price Action Setups: EUR/USD, GBP/USD, USD/CAD

US Dollar Price Action Setups: EUR/USD, GBP/USD, USD/CAD

2020-09-08 19:50:00
James Stanley, Strategist
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US Dollar Price Action Talking Points:

  • The US Dollar is continuing a bounce after a big zone of confluent support came into play last week.
  • As US equities continue to face pressure, questions abound as to whether stocks have topped-out or whether this is a mere pullback in a robust bullish trend.
  • This week’s economic calendar is busy, with rate decisions out of Mexico and Canada tomorrow, followed by the ECB on Thursday: The week finished with US inflation numbers on Friday, and this will be the first such release since the Fed’s widely-telegraphed shift at Jackson Hole.
  • The analysis contained in this archived webinar and the accompanying charts heavily relies on price action and chart formations. To learn more about price action or chart patterns, check out our DailyFX Education section. And if you’d like to join these webinars in the future, the below link will allow you to sign-up.
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It’s taken a little while but the USD has finally established some element of footing at a confluent zone of support. I had started asking the question as to whether USD bears had capitulated a couple of weeks ago. And while that may have been a little early, with the USD touching down to that fresh low on August 31st, so far September has brought a far different tone and the USD is currently working on its fifth consecutive bullish print on the Daily chart. This keeps the door open for bullish potential but this is far from game over, as potential resistance remains around the 94 level as well as 94.23, after which that 95 spot may come back into the equation.

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US Dollar Daily Chart

US Dollar Daily Price Chart

Chart prepared by James Stanley; USD, DXY on Tradingview

As to whether or not this happens – that’s likely going to depend on the rate decision remaining on this week’s economic calendar. But – USD bulls can take solace from the fact that the FOMC pronouncement at the open of this year’s Jackson Hole doesn’t appear to be getting much run from bears; and when ‘good’ news (for bears) is quickly dismissed, that often means something else is going on. In this instance, that bigger-picture confluent support combined with aggressive oversold conditions may be the ‘what else’ element to recent price action.

US Dollar Monthly Price Chart

US Dollar Monthly Price Chart

Chart prepared by James Stanley; USD, DXY on Tradingview

EUR/USD In Focus Ahead of the ECB

EUR/USD has so far held resistance at the 1.2000 handle, and this Thursday’s ECB meeting could bring a large bearing on what directional move shows up next.

Current supports appear around 1.1750 and then from around 1.1690-1.1709. Below that is potential for an air pocket that can run down towards the 1.1500 area.

EUR/USD BULLISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 4% 6% 5%
Weekly -20% 17% 1%
What does it mean for price action?
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EUR/USD Four-Hour Price Chart

EURUSD Four Hour Price Chart

Chart prepared by James Stanley; EUR/USD on Tradingview

GBP/USD Testing Below 1.3000 Big Fig

Cable is now testing below a key psychological level and if bulls can’t hold it up here, there may be a bearish trend in the not-too-distant future. But – if buyers are able to hold support above the 1.3000 handle going into today’s US close, the door can remain open for bullish scenarios in the pair.

GBP/USD BULLISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 5% 7% 6%
Weekly -11% 26% 6%
What does it mean for price action?
Get My Guide

GBP/USD Four-Hour Price Chart

GBPUSD Four Hour Price Chart

Chart prepared by James Stanley; GBP/USD on Tradingview

USD/CAD Gets Bullish Ahead of BoC

This has been an interesting pair. Two weeks ago USD/CAD was showing tendencies of a descending triangle with support showing around 1.3130-1.3150 while resistance was coming in at a series of lower-highs.

That triangle filled in and price action broke down, soon finding support around the 1.3000 spot on the chart as of last Tuesday. That has since led into a bullish reversal that’s seen a series of higher-highs and higher-lows post; and as shown during the webinar, USD/CAD appears to have even more topside trending potential than USD, itself, highlighting how that addition of CAD weakness could make for a stronger scenario of reversal potential.

Tomorrow’s Bank of Canada rate decision will likely loom large; and given the potential for a fresh trend, this can be an interesting area to investigate those themes in USD/CAD.

USD/CAD BEARISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 7% 3% 6%
Weekly -5% -7% -5%
What does it mean for price action?
Get My Guide

USD/CAD Four-Hour Price Chart

USDCAD Four Hour Price Chart

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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