US Dollar Price Action Setups: EUR/USD, GBP/USD

Forgive the pun, I couldn’t help myself. EUR/USD had set up for a test of resistance in the 1.1965-1.2000 area and the pair is staging a breakout to begin the week, testing above the big figure for the first time since early-March. It is difficult to imagine the US Dollar making a concerted move without at least some cooperation from EUR/USD, and given the Euro’s 57% allocation in the DXY US Dollar basket, that makes sense.

At this point, there’s another item of resistance that’s starting to come into play in EUR/USD, and this emanates from the 2017-2018 major move in the pair. The 38.2% Fibonacci retracement from that move is at 1.1709, and this price helped to catch the four-month low around the end of Q1.

The 23.6% retracement of that major move plots just above the 1.2000 handle, at 1.2033. That price is so far helping to hold the highs for today.

EUR/USD WEEKLY PRICE CHART

EURUSD Weekly Price Chart

Chart prepared by James StanleyEURUSD on Tradingview

GBP/USD: CABLE BACK TO THE BIG FIG

It’s been a big day for the British Pound. Coming into March trade GBP/USD was looking like one of the more consistent major pairs, sticking within a trend channel for most of the previous five months, spanning back to early-September. But that trend broke down later in the month as the USD-surge hastened into quarter-end.

GBP/USD found support at a confluent spot between a couple of long-term Fibonacci levels, and after a couple of tests at that zone, prices began to spring higher. That led into a bullish week, with GBP/USD gaining each day, and that theme has hastened so far this week as the pair is making a strong push up to a big area on the chart.

At this point, price action has begun to test the under-side of that bullish channel, and this is confluent with the 1.4000 psychological level. That’s the same 1.4000 psychological level that rebuked three different bullish advances in early March. Can buyers take it out this time?

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