U.S. Dollar Rally Drives Forward as Euro Correction Continues

Talking Points:

– The U.S. Dollar is continuing-higher after final Friday’s check of longer-term support around Non-Farm Payrolls.

– IG Client Sentiment on EUR/USD is now -2.11, and GBP/USD is -1.66. Given sell traders’ normal contrarian nature, this would be bullish indications for both pairs.

– DailyFX Q1 Forecasts have recently been released: Click here for full access.

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In yesterday’s article, we looked during a U.S. Dollar fluctuating gains after another check of support around final Friday’s Non-Farm Payrolls report. While prices sealed next insurgency final week, Dollar strength has continued into this week; and during this point, a Greenback is figure out uninformed 2018 highs as buyers pull prices higher. This opens adult a horde of engaging possibilities, as a integrate of pivotal U.S. information points dawn on a calendar for Friday of this week. This is when we’ll get U.S. CPI and Retail Sales data, and this can be an well-suited time for a U.S. Dollar to ‘put adult or close up’ per bullish intensity for a residue of a month.

On a hourly draft below, we’re focusing-in on this near-term trend and we’ve combined a integrate of intensity support levels formed on new cost action. Prior swing-high insurgency from 92.35-92.40 could be an assertive area to demeanour for higher-low support, and a bit deeper, we have an area of before insurgency that syncs adult with new swing-low support, using from 91.21-91.26, and this could be engaging for bullish delay on shorter-term charts:

U.S. Dollar around ‘DXY’ Hourly: Potential Support Zones Applied

U.S. Dollar Rally Drives Forward as Euro Correction Continues

Chart prepared by James Stanley

Longer-Term U.S. Dollar

On a longer-term basis, traders would expected wish a bit some-more acknowledgment before assigning bullish biases to a Greenback. Current insurgency is display around a Dec swing-low that had printed on a initial day of final month, so from a four-hour draft we still have a box of aged support display as stream resistance.

U.S. Dollar around ‘DXY’ Four-Hour: Dec Swing-Low Helping to Set Current Resistance

U.S. Dollar Rally Drives Forward as Euro Correction Continues

Chart prepared by James Stanley

A postulated mangle above a 92.60 turn in DXY would make a awaiting of bullish delay on a longer-term basement could demeanour a bit some-more attractive, and this would be driven by a arrogance that a operation that’s shown in a Dollar given Aug of final year would be set to continue. This is what we were looking during in a Q1 Technical Forecast on a U.S. Dollar, and this is accessible from a following link: DailyFX Q1, 2018 Forecasts.

U.S. Dollar around ‘DXY’ Daily: Sideways Since August, 2017

U.S. Dollar Rally Drives Forward as Euro Correction Continues

Chart prepared by James Stanley

Euro Correction Continues

Last Friday we had a unsatisfactory Non-Farm Payrolls news out of a United States when a title series came-in during 148k contra a expectancy of 190k. But progressing that morning we had another sip of beating from a opposite economy opposite a Atlantic: Core CPI out of a Euro-Zone for a month of Dec came in during .9% contra a expectancy of 1.0% flat, and given afterwards a Euro has been falling-lower. Yesterday, we looked during a integrate of support zones around 1.1940 and another from 1.1837-1.1880. The initial of those zones, during slightest adult to this point, has not been means to vaunt support. This adds concentration on that deeper section of support that straddles a 1.1850 level, and there is also a trend-line projection that runs by this area on a chart.

For those that are looking during holding on bullish bearing in EUR/USD, a revisit to that trend-line can be an appealing topic for looking to trigger prolonged positions, as this could concede topside entries in a rather risk-efficient fashion.

EUR/USD Four-Hour: Correction Continues, Support Potential 1.1837-1.1880

U.S. Dollar Rally Drives Forward as Euro Correction Continues

Chart prepared by James Stanley

GBP/USD

We discussed GBP/USD yesterday in a technical article, Strong 2017 Close Keeps Door Open for Sterling Strength. At a time, GBP/USD was trade nearby short-term insurgency around 1.3585, and we zoned-in on a intensity area of support straddling a 1.3500 psychological level. With this delay of USD-strength, GBP/USD has sunk into this zone, and during this point, it’s a diversion of calm to endorse that buyers are, in-fact, responding around this psychological level. Confirmed support in this zone, quite if support respects a before swing-low of 1.3493, a doorway is non-stop to topside setups in a pair, looking to play a short-term operation in a instruction of a longer-term trend.

GBP/USD Hourly: Testing a Support Zone Around 1.3500 Psychological Level

U.S. Dollar Rally Drives Forward as Euro Correction Continues

Chart prepared by James Stanley

— Written by James Stanley, Strategist for DailyFX.com

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