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

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

James Stanley, Senior Strategist

US Dollar Talking Points:

  • The US Dollar has started Q4 with weakness.
  • That Weakness has thus far been an approximate 50% correction of the September bullish move.
  • The analysis contained in article relies on price action and chart formations. To learn more about price action or chart patterns, check out our DailyFX Education section.
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The US Dollar has continued to pull back to begin Q4 trade. The 93.60 level last week only held for a short while, allowing for a push up to the 23.6% retracement from the same Fibonacci study; and price action has dipped down to another key zone that’s held the lows since last night. This zone runs from 93.18-93.36 and includes the 14.4% retracement of the March-September move, the 23.6% retracement of the June 30 – September 1 major move; and lastly the 50% marker of the September bullish bump. This confluent zone was looked at as subordinated support in last week’s webinar; and now that this level is in-play, doors may be opening to USD-strength scenarios in pairs such as EUR/USD or AUD/USD.

On the other side, USD weakness has been back for a couple of weeks now. The possibility of continuation should at least be entertained, and this is something that could add allure to the long side of GBP/USD, similar to what was looked at last week and the week before.

US Dollar Daily Price Chart

US Dollar Daily Price Chart

Chart prepared by James Stanley; USD, DXY on Tradingview

EUR/USD Budges Above Resistance – then Shows Indecision

The two resistance levels that I was tracking in EUR/USD last week did not hold – those were at 1.1750 and 1.1775. What did end up coming into play on the resistance side was the 1.1800 figure, which showed up overnight and has since helped to bring in a pattern of indecision, as shown on the below four-hour chart. With a series of dojis and spinning tops over the past few four-hour bars, buyers may be losing steam as sellers take a stronger swing. This can keep the door open for bearish scenarios but for traders looking for a bit of confirmation, re-encroachment below the 1.1750 big figure could start to make the short side of the pair look attractive again.

EUR/USD Four-Hour Price Chart

EURUSD Four Hour Price Chart

Chart prepared by James Stanley; EUR/USD on Tradingview

AUD/USD Finds Confluent Resistance

Perhaps more attractive on the long side of the US Dollar, at least at this point, is AUD/USD. The pair has pushed up to the .7185 level that was looked at last week, and this is confluent with a prior bullish trendline connecting early-June swing lows. This can keep the door open on the short-side of the pair, looking for a push back down towards the .7000 handle and, perhaps a bit deeper if the USD bullish run can continue.

AUD/USD Eight-Hour Price Chart

AUDUSD Eight Hour Price Chart

Chart prepared by James Stanley; AUD/USD on Tradingview

USD/CAD Tests Support

Also a potential item of attraction on the long side of the US Dollar, USD/CAD is testing a key support zone around the 1.3250 area on the chart.

USD/CAD Four-Hour Price Chart

USDCAD Four Hour Price Chart

Chart prepared by James Stanley; USD/CAD on Tradingview

GBP/USD: Cable Jumps Up to Another 1.3000 Test

On the short side of USD, I had been following GBP/USD after an area of support came into play last week. That support bounce continued all the way into this morning when prices in the pair re-tested the vaulted 1.3000 figure. But – that bullish run may not yet be done, especially if USD support cannot hold, and a bullish trendline pulled from the four-hour chart can provide a bit of framework to use for topside approaches in GBP/USD.

GBP/USD Four-Hour Price Chart

GBPUSD Four Hour Price Chart

Chart prepared by James Stanley; GBP/USD 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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