US Dollar Bounces From Support; EUR/USD Attempts To Break Congestion

US DOLLAR BOUNCE FROM FIBONACCI SUPPORT

The US Dollar is bouncing from a key area of Fibonacci support to open this week, and this takes place after a rough outing last week for USD bulls. After the Greenback filled last weekend’s gap, finding resistance at the prior close on three separate occasions, sellers took over to push prices down to 96.40. But, similar to what was seen last week, bearish pressure slowed, and prices began to bounce using the 96.47 Fibonacci level for an assist. The big question as we open this week is whether buyers can continue to push, or whether a larger wave of weakness is on the horizon.

US DOLLAR TWO-HOUR PRICE CHART: RESISTANCE AT LAST WEEK’S GAP, SUPPORT AT 96.47 FIBONACCI LEVEL

us dollar usd two hour price chart

Chart prepared by James Stanley

On a bigger-picture basis, there is a potential for a deeper sell-off or pullback after the US Dollar’s begun to trade below the bullish channel that’s been going since September. Strength showed in the currency after the September rate hike at the FOMC and lasted until we traded into December. Price action posed an initial test below this channel last week, but buyers soon reacted to the 96.47 Fibonacci level to push prices back-up to fill last week’s opening gap. But now that sellers have pushed back below this area, the big question is whether the support coming from that Fibonacci level can last for much longer. A bit deeper is additional support potential around 95.86-96.04.

US DOLLAR FOUR-HOUR PRICE CHART

us dollar usd four hour price chart

Chart prepared by James Stanley

THIS WEEK’S ECONOMIC CALENDAR

On this week’s economic calendar are two items of note out of the US, and that’s the Wednesday release of CPI data for November followed by Advance Retail Sales set to be released on Friday. Outside of the States, Europe is in focus in the latter-portion of the week as the ECB rate decision is on Thursday and Mario Draghi has a speech in Pisa, Italy on Friday.

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