USD Price Action Setups Ahead of Yellen


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– In this webinar, we used price action to analyze macro markets ahead of tomorrow’s Humphrey Hawkins testimony from Fed Chair Janet Yellen in front of Congress.

– The center of our discussion was the U.S. Dollar as shown in ‘DXY’. The Dollar remains extremely weak, and just ahead of our webinar, a tweet from Donald Trump Jr. appeared to illicit some interest across FX markets, and the Dollar was sliding lower during much of the session. This was a big part of our quarterly forecast, as myself and John Kicklighter looked at continued downside for the Greenback going into Q3.

– We then moved over to EUR/USD, which has just hit my first objective from last week’s Analyst Pick. I’m looking for additional upside here in the pair, but re-entry would need pullback so that support can be used to base risk management. We looked at a series of topside targets above 1.1500, including 1.1615 and 1.1714.

– We then moved over to GBP/USD, which I took a stop on earlier. As we’ve been discussing around this pair, there is the potential for more topside. As long as support shows north of the prior swing-low around 1.2750, bullish approaches could be utilized with the goal of topside trend resumption.

– We then moved over to AUD/USD, which ran into a long-term down-ward sloping trend-line last week. The pair appears to have put in the initial stages of a breakdown, and this could open the door to bearish strategies in the direction of the longer-term trend.

– We then looked at NZD/USD, which has put in a robust reaction to a confluent zone of resistance. Given the veracity of the bullish run until resistance came into play, traders may want to look for a bit of additional confirmation before looking to press the underside of the pair. For those that are looking to place near-term NZD-weakness strategies, AUD/NZD could be more attractive.

GBP/JPY – we looked at the prospect of bullish continuation in GBP/JPY. The pair has put in an aggressive bearish move to run down towards prior support around 146.00. We looked at how a trader can use price action in the attempt of confirming support before looking at taking on bullish exposure.

EUR/JPY – The parabolic move has continued, and price action is now well-elevated from the 130.00 psychological level. While the trend is very attractive here, prices are massively overbought, and I want to wait for some element of support before being able to add long exposure.

— Written by James Stanley, Strategist for DailyFX.com

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