Market Analysis

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

US Dollar, EUR / USD, GBP / USD, USD / CAD call points:

  • USD the weakness has continued and this morning saw US dollar hit a fresh four-month low.
  • The USD returned after some of Richard Clarida’s comments highlighted how surprised the Fed’s vice president was with the previous month’s 4.2% CPI publication. Although last week’s FOMC minutes showed that the Fed still considers inflation to be transient, with Mr Clarida’s recent comments showing that the consumer price index was out of expectations.

The US dollar has continued its downward trend, setting a fresh four-month low this morning. Now only the low swing of January around 89.20 prevents fresh perennial tides. Below 89.20, the 88.25 level stands out as the main focus, as it caught the lowest level in 2018 and is also a Fibonacci note level.

This afternoon, the driver appeared from Fedi’s vice-chairman Richard Clarida, who expressed surprise at the previous month’s inflation print. This begs the question of whether the bank still considers inflation to be transient and, if not, what could they do about it? It will also put more emphasis on the release of PCE data on Friday, as it is Fed’s preferred measure of inflation.

This could open the door to the USD’s withdrawal potential after a fresh low this morning. The current support area is huge, as you can see from the monthly chart below, and it may need a little more motivation before the bears can leave it.

US Dollar Monthly Price Chart

US Dollar Monthly Price Chart

The chart was compiled by James Stanley; USD, DXY trading view

EUR / USD range breaks

In the last week EUR / USD built into a fairly consistent range between a pair of highly visible Fibonacci levels. This morning, the initial movement of the USD weakness helped the pair break out to four-month highs; but Clarida’s comments helped set back.

There is upside potential here and it could be one of the more attractive looks for the USD.

EUR / USD two-hour price table

EURUSD two-hour price table

The chart was compiled by James Stanley; EURUSD trading view

GBP / USD: Trendline Underside Resistance cable drops

In GBP / USD, bulls have been at work for the last few weeks. The couple rose to a fresh three-year high last week. However, the bulls were only cuttings away from the peak in February and could not remove it.

There was some resistance from the familiar region, which is taken from the rising line between the lower levels of November and December. This forecast has resisted the last week and the changes. However, the trend remains bullish and at the webinar I looked at the support potential for tracking a couple.

GBP / USD daily price chart

GBPUSD daily price chart

The chart was compiled by James Stanley; GBPUSD trading view

USD / CAD deeply sold out

I’ve been a bear fan USD / CAD USD for weakness scenarios brought about by the Bank of Canada, one of the first central banks to start looking at post-pandemic policy.

Since that notification CAD-strength has been a fairly loud topic and USD / CAD has been almost vertical when linked to USD weakness.

The couple has already set fresh six-year lows. However, vendors dried up before the 1,2000 handle test could come into play, and as I researched yesterday, the pair may be key to a withdrawal in the near future given the resaleand combined with the above-mentioned long-term reference point in US dollars.

USD / CAD weekly price chart

USDCAD weekly price chart

The chart was compiled by James Stanley; USDCAD trading view

– Written James Stanley, Senior strategist to DailyFX.com

Get in touch and follow James Twitter: @JStanleyFX

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