US Dollar Price Action Setups: EUR/USD, GBP/USD, AUD/USD And USD/CAD

US DOLLAR STARTS Q3 WITH STRENGTH AFTER BEARISH CLOSE TO Q2

It’s been an interesting start to Q3 trade for the US Dollar. After the currency turned-over in the month of June, largely on the back of a dovish-flip at the Fed, the first week of July saw prices bounce-higher. That theme of USD-strength lasted into the first couple days of this week, until the Jerome Powell Humphrey Hawkins testimony on Wednesday, when weakness re-emerged on the back of another dovish tilt from the FOMC Chair.

Yesterday’s price action saw the US Dollar catch support around a prior area of resistance, and this keeps the door open for short-term themes of strength.

US DOLLAR TWO-HOUR PRICE CHART

(Click on image to enlarge)

us dollar usd two hour price chart

Chart prepared by James Stanley

On a longer-term or bigger picture basis, the more attractive side of the currency would likely be bearish. This would emanate from the recent break-below the rising wedge formation, combined with the support bounce in the Greenback coming in at a very logical area on the chart. The three-month-low in the US Dollar was set three weeks ago at 95.86, which is the 50% marker of the 2001-2008 major move in the currency. This price can function as future targets for short-side plays in the DXY index; and that scenario can be extrapolated to potential themes of USD-weakness in pairs looked at below such as EUR/USD or USD/CAD.

US DOLLAR WEEKLY PRICE CHART

(Click on image to enlarge)

us dollar usd weekly price chart

Chart prepared by James Stanley

EUR/USD HOLDS SUPPORT AT KEY ZONE AS SHORT SQUEEZE POTENTIAL REMAINS

On the short-side of the US Dollar, EUR/USD remains of interest. And to be sure, this isn’t necessarily because of any positive events around Europe; but more owed to the elongated bearish move that produced a series of bear traps in the month of May. That led into a strong month of June, and that strength has thus far continued to carry overtones into July trade as the pair has continued to hold higher-low support.

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