US Dollar, EUR / USD, AUD / USD Talking Points:
- Today marks the close of the third quarter and the next two days bring a economic calendar.
- USD the strength was evident in September, but it was a change of pace from the general trend of weakness. Who will take over in the fourth quarter?
- The analysis contained in item based on Price action and graphic training. To learn more about price action or chart patterns, check out our DailyFX Education section.
So we’re in the final hours of the third quarter and the rest of this week brings high impact data from the United States. This could serve to extend the USD’s short-term bullish trend or, perhaps, help bring the bears back into the mix to re-test those two-year lows that came into play earlier this month. .
Tomorrow could be particularly thoughtful as we will get both PCE and PMI numbers from the US. The PCE number will give an overview of inflationary pressure; and the next day brings Non-farm payroll market players will therefore have an up-to-date view of the employment situation in the United States. Collectively, these data spending can help reframe September spending that saw a noticeable change of pace in stocks and currencies.
US dollar: will September end as a bullish engulf?
In September, the US dollar was beset by a liquidation that had taken place since the peak in March. USD prices fell to new two-year lows on the first day of the month, running in a giant area of confluence support. This is where things start to change, and after maintaining support in the first two weeks of September, buyers became a bit more active last week to help the currency hit a new high.
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At this point, the monthly chart shows a not yet confirmed bullish engulfing pattern. These formations will often be approached with the aim of a bullish pursuit, and when taken against a background of long-term support, this can keep the door open for further bullish themes in the fourth quarter. For this training to confirm, today Price action is expected to close above the August open at 93.44.
US dollar monthly price chart
Short-term review of the issue: The US Dollar Shows Signs of Uptrend Potential, focusing on the recent string of higher ups and downs. The bigger question is where this higher-lower support can present itself. The price around 93.60 looks interesting, as this is the 38.2% retracement of the recent uptrend – and this level is confluent with an earlier swing-high. A little further, around 92.70-92.89 is another area of potential – but the question needs to be asked if that area comes into play – the bulls have started to forgo the white flag as the bears show more. great attraction.
Eight-hour price chart in US dollars
Graphic prepared by James stanley; USD, DXY on Tradingview
EUR / USD tests low-high resistance
From USD pairs, EUR / USD continues to have some appeal as an attractive option for USD strength. I had already talked about the resistance potential at the 1.2000 handle in the pair. This price came into play in early September after which sellers started to gain control, highlighted by a break in the wedge support rise. And after last week’s sharp surge in USD strength, EUR/ USD pushed all the way to the 1.1600 area before pulling back.
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EUR / USD Daily Price Chart
Going into this week, I had looked at the short side of the pair, resistance potential plotting around this price from earlier support, drawn from around 1.1750 psychological level. This resistance kicked in last night and prices fell over 70 pips. But the sellers were unable to keep the movement going and that level is now in play again.
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This can be an attractive option for those who want to research the strength of the US dollar through data spending tomorrow.
Four-hour EUR / USD price table
Big Fig AUD / USD rebound continues
AUD / USD has been on the right track since – an aggressive sell-off last week on the back of the strength of the USD. But – support appeared at .7000 psychological level and it helped reverse part of that movement. Buyers have returned with enthusiasm this week and prices are now pushing higher for a stress test around the previous support, taken from the .7185 Fibonacci level to around the .7200 handle.
There may be some early resistance at this point from an earlier trendline projection, shown in the chart below. A hold here may be interesting for sellers, but it’s likely that this large area of earlier support reoriented as resistance would be even more appealing.
AUD / USD Daily Price Chart
— Written by James stanley, Strategist for DailyFX.com
Contact and follow James on Twitter: @JStanleyFX