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

US Dollar, EUR/USD, GBP/USD, USD/CAD, AUD/USD Talking Points:

  • Despite the headlines, the US Dollar remains in the same range that’s been in-play through most of March.
  • Even with the USD remaining range-bound there’s a number of other pairs showing attractive formations, such as EUR/USD looked at yesterday, or the continued reversals in GBP/USD or AUD/USD.
  • 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.

We’re not quite a week from the FOMC rate hike but, already we can gauge a muted reaction in the US Dollar. While the USD initially trickled lower after that rate decision, support played in at the same area that held the lows earlier in March and that gave a bump to near-term price action.

That support inflection took place on Thursday morning, so just after the rate hike, and that led to a relatively clean run of strength into last night; at which point the Dollar turned around and reverted to a prior support level near the mid-point of its recent range. This is the same zone around 98.32-98.45 that I was looking at ahead of the rate decision and it remains of interest at this point.

But, to be clear, the US Dollar remains in a near-term range that’s been in-play for much of March. And there may even be a bearish bias that’s starting to build, as lower-highs go along with horizontal support. This could, eventually, built in a descending triangle pattern which is often approached for bearish breakdowns. A setup of that nature wouldn’t necessarily negate the longer-term bullish trend but it could highlight a deeper pullback in that big picture move, that I’ll look at below.

US Dollar Four-Hour Price Chart

Chart prepared by James Stanley; USD, DXY on Tradingview

USD Longer-Term

Taking a step back to the daily chart and the topside trend in the USD remains in working order. If a deeper pullback does develop, there’s support potential around both 97.50 and 97.00. Channel support currently projects to around 96.20, and that trendline would be confluent with the 96.47 Fibonacci level around the Q2 open. This could be looked to as a form of invalidation, as there hasn’t been a daily close below this trendline since it came into play last June.

US Dollar Daily Price Chart

US Dollar Daily price chart

Chart prepared by James Stanley; USD, DXY on Tradingview

EUR/USD

I had written about EUR/USD yesterday as the pair was showing both a bullish and a bearish candlestick formation. The shorter-term look carried bullish potential, with an ascending triangle. The longer-term look, however, was bearish as a rising wedge printed after a long-term Fibonacci level came into play in early-March.

The bearish side began to fill-in earlier this morning as prices breached the psychological level at 1.1000, with EUR/USD eventually meandering down to the next support on my chart at 1.0958. That level has since led to a bounce as the USD has pulled back, but this does keep bearish scenarios as possible given the recent lower-low combined with a possible lower-high.

For near-term resistance, the 1.1057 level remains of interest as this was support before the descending triangle broke-down earlier in March. Above that, the same 1.1104-1.1140 zone is secondary resistance potential.

EUR/USD Four-Hour Price Chart

EURUSD price chart

Chart prepared by James Stanley; EURUSD on Tradingview

GBP/USD Breakout – Resistance at Prior Support

On the short side of the US Dollar I’ve been favoring GBP/USD of late, largely on the basis of the 1.3000 support inflection that showed last week. This is a major psychological level that has some history on the pair, and, at this point, it was the inflection point that reversed the flow in GBP/USD.

I talked about this setup at length in last week’s webinar and it’s continued to fill-in, with price action now testing fresh near-term highs right at a spot of prior support. This keeps the door open for bullish continuation, and support potential can now be cast towards prior short-term resistance, taken from around either 1.3167 or 1.3194.

GBP/USD Four-Hour Price Chart

GBPUSD price chart

Chart prepared by James Stanley; GBPUSD on Tradingview

USD/CAD Reacts to Long-Term Trendline

Back on the long side of the US Dollar and USD/CAD remains of interest. I had highlighted a longer-term spot of support in the pair last week, taken from a bullish trendline that guided the pair higher for much of the second-half of last year. That trendline came into play yesterday after I alerted to that potential last Thursday, and buyers have been making quick work of the matter since.

That trendline has since helped to hold the lows, and this can keep the door open for short-term reversal potential. The longer-term formation remains an ascending triangle so if bulls can get their business together, this could lead to a bigger-picture breakout scenario. But, the first key is holding support at the trendline to allow the formation to remain in-play.

USD/CAD Daily Price Chart

USDCAD Daily Price Chart

Chart prepared by James Stanley; USDCAD on Tradingview

AUD/USD Bulls Rush In

Since early-February I’ve focused short-side USD scenarios into AUD/USD. The pair started last month with a support test at the big figure of .7000, and this allowed for the build of a falling wedge formation. Such setups are often approached with the aim of bullish reversals, and that’s precisely is what started to go down in the pair later in the month and through early-March.

Ahead of FOMC, however, AUD/USD put in a strong pullback, eventually finding support around the 38.2% retracement of the recent major move. As I wrote last Tuesday, bulls needed to respond quickly to keep the door open for bullish strategies, and they did just that. A doji printed last Tuesday with a big green bar on Wednesday, around the FOMC rate hike, to build a morning star formation. Those setups are often followed with the aim of bullish continuation and, again, that’s exactly what went down.

Buyers have been pressing ever since and this morning brought a fresh four-month-high into the mix. This keeps the door open for bullish scenarios in AUD/USD, particularly for traders that are looking for a deeper pullback in the USD-theme looked at in the beginning of this article.

AUD/USD Daily Price Chart

AUDUSD Daily Price Chart

Chart prepared by James Stanley; AUDUSD on Tradingview

— Written by James Stanley, Senior Strategist for DailyFX.com

Contact and follow James on Twitter: @JStanleyFX

element inside the element. This is probably not what you meant to do!
Load your application’s JavaScript bundle inside the element instead. https://platform.twitter.com/widgets.js

Originally Posted on: https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/daily_fundamentals/2022/03/22/US-Dollar-Price-Action-Setups-EUR-USD-EURUSD-GBP-USD-GBPUSD-USD-CAD-USDCAD-AUD-USD-AUDUSD.html
By: James Stanley

Written by:

9,590 Posts

View All Posts
Follow Me :

Leave a Reply

%d bloggers like this: