S&P Bounces From Fibonacci Support, US Dollar Clings to 90.00 to Begin Q2

Talking Points:

– Q2 started with a crash opposite equity markets as yesterday saw another bearish expostulate show-up in a SP 500. A bit of support came-in around a 38.2% retracement of a post-Election pierce before a US tighten yesterday, and a SP 500 has bounced adult to find a bit of short-term insurgency around an area of before support.

– The US Dollar continues to adhere to a 90.00 turn in DXY, and this keeps a doorway open for a array of engaging scenarios on both sides of a Greenback. On a short-side of USD are setups in both EUR/USD and USD/JPY that can sojourn engaging in a near-term, and we demeanour during any below.

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Do we wish to see how sell traders are now trade a US Dollar? Check out a IG Client Sentiment Indicator.

US Stocks Start Q2 on a Rough Note

Yesterday’s open was not accessible to US equities, as a discerning drop to start Q2 ran for a initial partial of a trade day. The SP 500 done a quick proceed towards a Feb double-bottom during 2,530; though a bit of support showed adult around 2,550 forward of a tighten with prices rallying-up to lower-high resistance. Price action in US equity futures has remained mostly fast in a overnight event and prices are holding on to yesterday’s support proceed this morning’s open.

SP 500 Four-Hour Chart: Pull Back to Find Resistance Around Prior Short-Term Support

sp 500 4 hour chart

Chart prepared by James Stanley

At this point, prices have rallied behind to a 76.4% retracement of bullish pierce off of a Feb lows; and this is an area that had formerly helped to burn some support during final week’s sell-off. Resistance display around before support keeps US bonds in a bearish state as we pierce into a month of April, and a theatre appears set for a retest of 2,530. And if that support can’t reason adult after a third test, a bearish expostulate could grow extremely larger.

Yesterday’s low came-in around a 38.2% Fibonacci retracement of a post-Election pierce in a SP, and this is during 2,554. Underneath that, we have that Feb low during 2,530, and a bit reduce we have a before pitch around 2,490. The 50% retracement of a post-Election pierce resides during 2454, and if we can’t reason here, a doorway is non-stop for a exam of a 61.8% retracement a 100-handles lower.

SP 500 Daily Chart: Potential Supports Applied

SP 500 Daily Chart

Chart prepared by James Stanley

NFP, Euro-Zone CPI Highlight This Week’s Calendar

This week’s economic calendar has dual splendid spots of sensitivity on a docket, with Euro-Zone CPI set to be expelled tomorrow with Non-Farm Payrolls on a calendar for Friday. We also get Canadian Jobs numbers on Friday morning, environment adult USD/CAD for an generally flighty backdrop around a pair.

NFP could be generally thinking given a cross-market reactions after final month’s FOMC rate decision.

DailyFX Economic Calendar: Euro-Zone CPI, NFP Highlight The Remainder of This Week’s Docket

DailyFX Economic Calendar

Chart prepared by James Stanley

US Dollar Clings to 90.00 to Start Q2

It’s been a rather delayed start to a entertain given that many markets remained sealed yesterday in tact of Easter. And to open this week, a US Dollar really most looks like it’s been trade by a holiday, as yesterday gave us a doji nearby a 90.00 turn on DXY and today’s bar, during slightest so far, is display some-more of a same.

To tighten Q1, we looked during a bigger design setup behind a Greenback and this exposes a pivotal turn around 88.42. This is a 61.8% retracement of a 2014-2017 pierce in DXY, and this turn helped to carve-out support after tests in both Jan and February. The 50% retracement of that same Fibonacci investigate had formerly helped to symbol a 2017 low after a exam in Sep of final year, and that led to dual months of strength before Dollar bears were behind in control.

The large disproportion in a January/February exam of a 61.8% turn was a fact that bears remained sincerely active here, stability to sell on tests of resistance. This indicates that a Dollar’s bearish expostulate might not nonetheless be over.

US Dollar around ‘DXY’ Weekly Chart: 61.8% Fibonacci Support Holds Lows in January/February

us dollar weekly chart

Chart prepared by James Stanley

On a shorter-term basis, we can see where a area between 90 and 91.01 in DXY has been a formidable place on a draft for USD-bulls. The turn of 91.01 was a 2017 low, and this was taken out by a Jan sell-off in DXY. But given then, bulls have been incompetent to make most belligerent as tests above 90.00 were met with some-more sellers.

US Dollar around ‘DXY’ Daily Chart: Dollar Bears Remain Vigilant After Test of Long-Term Support

us dollar daily chart

Chart prepared by James Stanley

EUR/USD Sitting on Support Around 1.2300

With DXY contrast a informed turn of insurgency during 90.00, we also have EUR/USD contrast a informed turn of support during 1.2300. We discussed this setup on a integrate of different occasions as we wound down Q1, and a longer-term setup really most stays with a 2017 bullish trend-line roving underneath stream cost action. For those that are looking during plays of USD-weakness, a topside of EUR/USD will expected sojourn as one of a some-more appealing venues for such a theme.

EUR/USD Daily Chart: Longer-Term Bullish Trend Remains Short-Term Range-Bound

eurusd daily chart

Chart prepared by James Stanley

On a four-hour draft below, we’re focusing-in on EUR/USD cost movement in 2018, that has been mostly range-bound after a bullish detonate to start a New Year.

EUR/USD Four-Hour Chart: Range-Bound for Much of 2018

eurusd 4 hour chart

Chart prepared by James Stanley

USD/JPY Short-Term Trend Channel Meets Longer-Term Trend-Line

We’ve been following USD/JPY in a latter-half of Q1 after some longer-term levels of support have started to come into play, and for a past integrate of months, cost movement has oscillated around these levels with a bearish altogether bias. On a weekly draft below, we’re focusing-in on a support side of a exquisite crowd that started to give approach in Feb and March, and is now assisting to set short-term resistance.

USD/JPY Weekly Chart: Support Side of Symmetrical Wedge Starts to Give Way in Q1

usdjpy weekly chart

Chart prepared by James Stanley

On a four-hour draft below, we’ve kept that longer-term trend-line in blue, and we’ve combined a shorter-term bearish channel in Orange. This highlights how a mangle of that longer-term support could still be in routine as February/March have led to a array of lower-lows and lower-highs in a pair.

USD/JPY Four-Hour Chart: Shorter-Term Channel, Longer-Term Trend-Line (in Blue)

usdjpy 4 hour chart

Chart prepared by James Stanley

To review more:

Are we looking for longer-term research on a U.S. Dollar? Our DailyFX Forecasts for Q1 have a territory for any vital currency, and we also offer a engorgement of resources on USD-pairs such as EUR/USD, GBP/USD, USD/JPY, AUD/USD. Traders can also stay adult with near-term positioning around a IG Client Sentiment Indicator.

Forex Trading Resources

DailyFX offers a engorgement of tools, indicators and resources to assistance traders. For those looking for trade ideas, a IG Client Sentiment shows a positioning of sell traders with tangible live trades and positions. Our trading guides move a DailyFX Quarterly Forecasts and a Top Trading Opportunities; and a real-time news feed has intra-day interactions from a DailyFX team. And if you’re looking for real-time analysis, a DailyFX Webinars offer countless sessions any week in that we can see how and because we’re looking during what we’re looking at.

If you’re looking for educational information, a New to FX guide is there to assistance new(er) traders while a Traits of Successful Traders research is built to assistance whet a ability set by focusing on risk and trade management.

— Written by James Stanley, Strategist for DailyFX.com

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