FX Price Action Setups as a U.S. Dollar Dips Deeper into Prior Resistance

Talking Points:

– The U.S. Dollar is descending deeper into a section of before resistance. Will bulls respond, or are we headed for another run of debility in a Greenback as we pierce towards year-end?

– The Dollar stays stretched opposite many majors, with EUR/USD during -2.52 and Gold during +4.09. Click here to entrance a IG Client Sentiment Indicators.

– Looking for trade ideas? Check out a trade guides. And if you’re looking for something some-more interactive in nature, check out a DailyFX Webinars.

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In yesterday’s article, we looked during a U.S. Dollar starting to exam a before section of resistance after a discerning rebound off of a 94.30 area. This section had reason a highs in a U.S. Dollar for 3 months this year; though after the ECB rate preference in late-October, a Dollar reason a bid to finally break-above. That strength has reason for many of a two-and-a-half weeks given that rate decision, with higher-low support display around 94.44. But as we warned final week, a longer that this support was tested a some-more expected a down-side break, and after opening this week with a discerning rebound off of 94.30, prices have dipped deeper into a section towards 94.00.

U.S. Dollar around ‘DXY’ Hourly: Pullback Dips into Zone of Prior Resistance

FX Price Action Setups as a U.S. Dollar Dips Deeper into Prior Resistance

Chart prepared by James Stanley

The large doubt during this indicate is if bulls are going to uncover fill-in anytime soon. As we’ve been discussing, given a sincerity of a bearish pierce that took place in a initial 9 months of this year, a bullish annulment in a U.S. Dollar might take some time to solidify. This exposes before swing-lows for bullish strategies, and a levels around 93.48 and 93.06 turn serviceable for a aim of trade top-side delay in a U.S. Dollar. If prices break-below 92.75, afterwards a before section of feeder support from 91.17-91.36 is unprotected for short-side targets as uninformed lows would seem extremely some-more likely.

U.S. Dollar around ‘DXY’ Four-Hour: Break-Below 92.75 Eradicates Bullish Theme, Bearish Focus to 91.36

FX Price Action Setups as a U.S. Dollar Dips Deeper into Prior Resistance

Chart prepared by James Stanley

Also discussed yesterday was a section of before support in EUR/USD that had shown a integrate of opposite instances of resistance. This section runs from 1.1685-1.1736, and after sellers had shown adult around 1.1685 on dual opposite occasions, a awaiting of a deeper insurgency exam began to seem some-more likely. The large pierce in EUR/USD happened around a Oct ECB rate decision, and this saw a span dump from around 1.1837 all a proceed down to 1.1553 a integrate of weeks later. But after environment that uninformed low final week, buyers have showed adult to pull prices higher, and we’re now trade by a tip finish of that section of before support. This exposes a organisation of swing-highs on a draft that showed forward of ECB. These run from that 1.1837 turn adult to 1.1880, and as prolonged as prices sojourn subsequent this zone, a intensity for bearish delay remains. If we do mangle above this zone, a re-test of 1.2000 would seem likely, so this could be an thought area for stop placement/strategy reversal.

EUR/USD Four-Hour: Break-Above Prior Support Zone, Prior Resistance Remains 1.1837-1.1880

FX Price Action Setups as a U.S. Dollar Dips Deeper into Prior Resistance

Chart prepared by James Stanley

The British Pound, meanwhile, continues in a rather choppy, undiluted manner. The daily draft of GBP/USD hasn’t had many for trends given well-before a BoE rate travel progressing in November. After that rate hike, prices done a bee-line to locate support on a bullish trend-line projection, and prices have continued to work around that turn for a past week and a half. We’ve been looking for a accordant mangle of this spill before looking to allot a trend-side direction, and on a bearish side of a span that’s a area that runs from 1.2982-1.3026.

GBP/USD Daily: Choppy, But Still Respecting 2017 Bullish Trend-Line

FX Price Action Setups as a U.S. Dollar Dips Deeper into Prior Resistance

Chart prepared by James Stanley

NZD/USD

The Kiwi-Dollar has been unequivocally bearish of late, and this is being driven by a integrate of opposite themes out of New Zealand. Jacinda Ardern won a PM mark for a nation in early-August, and a banking has been on a landslide given then, dropping from above .7500 down to a .68’s. A few weeks ago, prices finally found some component of support right around a before 2017 low, and this constructed a double-bottom arrangement with a support turn around .6820. This exposes a span for a down-side break, and if we do see .6820 taken-out, a doorway is non-stop for short-side strategies targeting before support levels around .6750, .6675, .6608 and afterwards .6500.

NZD/USD Daily: Double Bottom Around 2017 Lows

FX Price Action Setups as a U.S. Dollar Dips Deeper into Prior Resistance

Chart prepared by James Stanley

AUD/USD

Over a past few weeks, we’ve been following a short-side of AUD/USD as a proceed to trade USD-strength. While a Euro was exciting, that fad could lead to additional volatility, creation a awaiting of trade dual turns during once (in both Euro and USD) a rather difficult manner. Looking for USD-strength opposite a Aussie, during a really least, private that Euro sensitivity from a equation, and given we looked during that Analyst Pick, AUD/USD has continued a down-side move, and we combined to a position final week in another Analyst Pick.

Yesterday brought another enlivening growth as prices finally pennyless subsequent a 50% Fibonacci retracement of a 2017 bullish move. This turn had formerly helped to reason a lows, though yesterday’s bearish bar gathering prices subsequent for a initial daily tighten by this support level.

AUD/USD Daily: Daily Close Below 50% Retracement of 2017 Bullish Move

FX Price Action Setups as a U.S. Dollar Dips Deeper into Prior Resistance

Chart prepared by James Stanley

On a hourly draft below, we’re removing a bit closer with a pierce to focus-in on this new support break. Prices are in a routine of tilting-higher, though sellers are showing-up around a same Fibonacci turn looked during above. We’ve combined 3 points of insurgency for traders looking during short-side delay approaches.

AUD/USD Hourly: Sellers Re-Entering Around Prior Support

FX Price Action Setups as a U.S. Dollar Dips Deeper into Prior Resistance

Chart prepared by James Stanley

USD/CAD

Surprisingly, USD/CAD was one of a many surpassing trends of 2017, during slightest so far. When a Bank of Canada started articulate adult rate hikes progressing in a summer, this reason utterly a few by surprise. This led to dual rate hikes from a BoC, in Jul and afterwards in September; though after that second rate hike, something changed. The BoC started to get some-more pacifist and dovish while a Fed continued to speak adult a awaiting of a Dec travel along with their expectancy for 3 some-more rate rises in 2018. In brief order, that bearish trend had turn a bullish theme, and a trend-channel began to uncover only a integrate of days after that Sep rate hike.

USD/CAD Four-Hour: Bullish Channel Forms After BoC’s Sep Rate Hike

FX Price Action Setups as a U.S. Dollar Dips Deeper into Prior Resistance

Chart prepared by James Stanley

More recently, as in over a past few days, that before down-trend has begun to uncover again. This has led to a pivotal support exam around 1.2672, as this is a 38.2% retracement of a 2011-2015 vital move, and this turn had showed connection with a support side of that bullish trend-channel. If we do finally take-out that level, a awaiting of deeper waste and a lapse of that bearish trend will demeanour extremely some-more attractive. On a draft below, we’ve combined 3 support levels subsequent this feeder zone, any of that can duty as distinction targets for a down-side delay approach.

USD/CAD Hourly: Bounce Off Confluent Support Exposes Potential for Down-Side Break

FX Price Action Setups as a U.S. Dollar Dips Deeper into Prior Resistance

Chart prepared by James Stanley

USD/JPY

The large concentration around USD/JPY appears to revolve around a longer-term setup. While we’ve been saying some shake in a Dollar of recent, USD/JPY appears to be during slightest rather indifferent by these themes. Longer-term, USD/JPY has been holding around a feeder section of insurgency for a few weeks now. The turn around 114.03 is a 23.6% Fibonacci retracement, and this area has reason a highs in a span given May. But some-more recently – this area has intersected with a down-ward tilted trend-line that creates adult a longer-term exquisite crowd pattern, and USD/JPY has continued to slight deeper into this pattern.

USD/JPY Daily: Symmetrical Wedge with Prices Testing Resistance

FX Price Action Setups as a U.S. Dollar Dips Deeper into Prior Resistance

Chart prepared by James Stanley

If we do finally see fortitude of this wedge, a subsequent pierce could be super-charged as USD/JPY finally exhibits some component of trend after a year that’s seen substantial congestion. And while this might seem judicious to design such an instance on a topside as we continue to exam around resistance, traders should equivocate statute out another bearish run as driven by tensions around North Korea, taxation policy, etc.

If we do finally get a mangle of a 115.00 psychological level, a array of engaging top-side targets open up. We’ve enclosed a few of those subsequent on a proceed adult to a 2017 high around 118.67. If we do take out a 2017 high, a run towards 120.00 appears expected shortly after that takes place, as small would be station in a proceed of a bullish delay run.

USD/JPY Daily: Bullish Break Exposes Targets Towards 120.00 Psychological Level

FX Price Action Setups as a U.S. Dollar Dips Deeper into Prior Resistance

Chart prepared by James Stanley

— Written by James Stanley, Strategist for DailyFX.com

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