US Dollar Back-and-Forth Start to Q3, EUR/USD Tests Key Resistance

Talking Points:

– The US Dollar has started off Q3 in a rather directionless manner, initial rallying and afterwards pulling back, and we’re really nearby where we started a uninformed quarter. The large doubt around a Greenback as we pierce deeper into a second-half of a year is either a strength that showed in Q2 has delay power, or either that was though a blip in a radar of a longer-term trend. If you’d like to see a longer-term Quarterly Forecast on a US Dollar, DailyFX has recently expelled a forecasts as partial of a Trading Guides, that are accessible directly from a following link: DailyFX: US Dollar Q3 Forecast.

– EUR/USD has started off Q3 with a re-test of a pivotal territory of resistance, and short-term dynamics prove that we competence get a deeper retracement before a bearish trend is prepared for resumption. USD/JPY, meanwhile, has not been bashful about environment uninformed highs as a span has changed to a uninformed five-week high as we open Q3. The large doubt around a Yen is either another spate of debility develops, and this is expected tied to a incomparable themes of tellurian risk aversion. With acceleration in Japan remaining tame, and a ECB relocating towards impulse taper, a doorway can sojourn open for Yen debility should ‘flight to quality’ or ‘safe-haven’ themes take a behind chair to a ‘risk on’ trade.

– DailyFX Forecasts on a accumulation of currencies such as a US Dollar or the Euro are accessible from a DailyFX Trading Guides page. If you’re looking to urge your trade approach, check out Traits of Successful Traders. And if you’re looking for an rudimentary authority to a Forex market, check out a New to FX Guide.

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

Directionless Dollar to Kick off Q3

Last entertain finished on a clever note for a US Dollar, and this helped to mangle a unemployment that had lasted for many of a before year. The bid in USD showed in a third week of April, and carried a banking for a generation of a quarter, eventually assisting to furnish an 11-month high only a integrate of days forward of quarter-end.

With this week being a holiday-week in a United States, as tomorrow is Independence Day and many traders have taken vacation forward of a holiday, price action has been rather tame so distant with a bit of back-and-forth. The large doubt is either we get prices dropping down to re-test a pivotal territory of support that rests from 94.20-94.30.

US Dollar around ‘DXY’ Four-Hour Chart: Dollar Dithers After Bullish Q2

US Dollar usd four-hour chart

Chart prepared by James Stanley

EUR/USD Testing Resistance to Kick Off Q3

Last entertain saw some rather aggressive offered uncover adult in EUR/USD, and notwithstanding 3 unsuccessful attempts to take out a 1.1500 psychological level, a span really many remained in a bearish state as we sealed down a initial half of a year. To flog off Q3 a span is remaining resistant during a pivotal area on a chart, and this is a same territory that had helped to set support in a latter-third of final year, and many recently has started to offer as resistance.

EUR/USD Daily Chart: Continued Resistance during Key Zone 1.1685-1.1736

eurusd eur/usd daily chart

Chart prepared by James Stanley

On a shorter-term basis, we can see where bears have started to get a bit some-more bashful around tests of before lows. Last Thursday saw a higher-low imitation about 15 pips above a before low of 1.1510, and yesterday helped to furnish another short-term higher-low, giving a entrance that bears competence take a bit of a break, and this can open a doorway for a deeper retracement in a pair. Above this stream insurgency territory is another area of resistance, and this is taken from a Jun swing-high that showed around 1.1855. As prolonged as prices sojourn next this swing, a doorway stays open for selling.

EUR/USD Four-Hour Chart: Bearish Trepidation during Prior Lows, Deeper Retracement Potential

eurusd eur/usd four-hour chart

Chart prepared by James Stanley

Yen Weakness Re-Emerges

One important regard so distant in a new entertain is a lapse of Yen weakness. USD/JPY changed adult to a uninformed five-week high to flog off Q3, and a span is pulling behind a bit after anticipating uninformed sellers above 111.00. This comes after a rather accordant run of Yen debility started to rise as we wound down Q2, and that thesis of USD/JPY strength lasted into this morning’s European open, during that indicate prices started to lift back.

USD/JPY Four-Hour Chart: Return of Yen Weakness Brings Fresh Five-Week Highs to Start Q3

usdjpy usd/jpy four-hour chart

Chart prepared by James Stanley

The large doubt around a Yen as we pierce deeper into Q3 is expected tied to a incomparable doubt of altogether tellurian risk aversion. As risk hatred showed-up in a initial half of 2018, Yen strength came along with it. That thesis remained sincerely conspicuous by Q1, and final entertain was really many a annulment of that theme, as 76.4% of a Q1 down-trend was erased in Q2. This keeps a span in a bullish mark as we pierce deeper into a year, with sold importance on invulnerability of a area turn 108.98, that is a 50% retracement of a Q1 sell-off in USD/JPY.

USD/JPY Eight-Hour Chart

US Dollar Back-and-Forth Start to Q3, EUR/USD Tests Key Resistance

Chart prepared by James Stanley

US Stocks Reverse Early Losses to Start Q3

Yesterday’s event non-stop with offered opposite US equities, and this was rather of a delay of a sensitivity that had showed opposite US indices in a initial half of 2018. But, as we’ve seen a few times in a new past, progressing gap-losses were recovered and US bonds sealed yesterday’s event in a Green. The large doubt opposite US bonds as we pierce into a second-half of a year is either a sensitivity that showed in Q1 and lasted by Q2 was a blip on a radar, or a pointer of things to come.

In a SP 500, prices continue to work within a proportions of a Fibonacci retracement constructed from a Feb sell-off. The 50% pen of that pierce during 2703 has been assisting to set support over a past dual weeks, while we also have intensity short-term insurgency during before support, or a 61.8% retracement of that move.

SPX500 Daily Chart: Continues to Work Within Confines of Feb Fibonacci Retracement

SPX500 Daily Chart

Chart prepared by James Stanley

The Dow Jones Industrial Average looks a bit reduction enthusiastic, as prices are entrance off of fresh seven-week lows that were determined only final week. The before support territory that runs from 24,384-24,522 has been assisting to set insurgency over a past week, and this highlights a intensity for a deeper pierce of debility before a longer-term bullish trend competence turn appealing again.

The area that we’ve been following for intensity top-side resumption comes-in off of a trend-line constructed from a earlier-year swing-lows, taken from February, Apr and May lows. If prices finally are means to find some component of durability support during this area, a doorway can re-open for bullish strategies. Until then, there stays bearish short-term intensity in a index.

Dow Jones Daily Chart: Resistance during Prior Zone of Fibonacci Support, Trend-Line Support Potential

Dow Jones DJIA DIA Daily 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

Contact and follow James on Twitter: @JStanleyFX

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