(MENAFN- DailyFX) US Dollar, EURUSD, AUDUSD Price Outlook Talking PointsTheUS Dollarhas put in a month of transition so far in June, breaking-lower around a dovish twist at the federal Reserve. The big question is whether this theme can continue to drive through the Q3 open next week. The US Dollar is testing a support level at two-month-lows around 96.03. For traders looking at a bounce inUSD , the short-side ofAUDUSDcan remain as interesting. For traders looking at a continuation of US Dollar-weakness, the topside ofEURUSDcan remain as interesting as the pair makes a move towards the 1.1400 psychological level. DailyFX Forecasts are published on a variety of markets such asGold , theUS Dollarorthe Euroand are available from theDailyFX Trading Guides page . If you're looking to improve your trading approach, check outTraits of Successful Traders . And if you're looking for an introductory primer to the Forex market, check out ourNew to FX Guide . US Dollar Drop Continues After FOMC
Last week was big for the Greenback , as the US Dollar sank below a number of support levels on the heels ofa dovish twist at the Fed . After carrying bullish overtones for the better part of the prior thirteen months, the US Dollar came into Q3 with an ascending wedge formation. Such a backdrop will often be approached with the aim of bullish continuation, and that led into breakouts in April and May as the US Dollar pushed up to a fresh yearly high at 98.33. But, the month of May was marked for change, as an outsized equity sell-off started to create worry at the Fed, and as the door opened into June,FOMCChair Jerome Powell offered some supportive comments that gave the appearance that the bank may be nearing a dovish posture for the months ahead. In short order,the US Dollar folded-lower as equities began to trend-up again .
At this point, the US Dollar has taken-out a number of key support levels. As looked at earlier in the month, the lack of enthusiasm from buyers near resistance led to the build of another formation;this time a rising wedge . Such a backdrop will often be approached in the opposite manner as the setup looked at above – as traders look for the lack of enthusiasm near resistance to, eventually, play-through for a break of support. That happened last week as USD fell out of the bottom of that formation.
US Dollar Weekly Price Chart
Chart prepared byJames Stanley
The US Dollar is now testing a key level at 96.03, which is the 50% marker of the 2017-2018 sell-off. A bit lower is a prior swing-low around 95.68, followed by a big level of prior support around the 95.00psychological level . Below that, a big confluent zone ofFibonaccisupport potential exists from 93.86-94.30.
For those looking to sell, a pullback to find resistance at the Fibonacci level of 96.47 can open the door for such a scenario. With such a rigid level of prior support being taken-out, this can be an interesting level to continue to watch forprice actionto revisit.
US Dollar Daily Price Chart
Chart prepared byJames Stanley
EURUSD Nears 1.1400, Fresh Two-Month-Highs After Dovish Draghi
Coming into the month EURUSD was one of my favored spots to look for short-side USD exposure . And this wasn't borne from any particular optimism around the Euro-zone as much as the length of time that the bearish side of the pair has been in-favor. Perhaps most importantly,the past few months have brought a variety of bearish triggers into the spotlightbut, to date,Eurobears haven't been able to make much of a mark. This produces a backdrop ripe for short-squeeze scenarios which is what appears that we have in-front of us. EURUSD is climbing to fresh two-month-highs, making a fast advance towards the longer-term zone of range resistance at 1.1448-1.1500. This move is likely taking a number of trailed stops out along the way; and once prices perch above the 1.1500 psychological level, the ground may be open for sellers to return.
EURUSD Daily Price Chart
Chart prepared byJames Stanley
AUDUSD Tests Resistance, Sets Up Fade Potential
For traders that would like to fade this recent run of USD-weakness, AUDUSD may remain of interest. It's been a topsy-turvy month for the pair as a 'rate cut rally' earlier this month brought a big resistance zone into play that runs from .7000-.7019. I had looked at this area a couple of weeks ago for short-side setups in the pair, and this soon came into play after that RBA rate cut.But the next week-and-a-half after that were decidedly more bearish as AUDUSD plunged down to a fresh five-month-low , testing the .6830 area before selling pressure dried up.
As USD-weakness has taken-over around the FOMC flip, prices have retraced-higher and are currently testing resistance at a prior area of key support, taken from the .6955-.6960 area looked at last week.
For traders that want to buy the US Dollar, looking to fade this recent run of weakness, even if only for a short-term retracement in a longer-term theme, and AUDUSD can remain of interest as this resistance zone helps to hold the highs.
AUDUSD Two-Hour Price Chart
Chart prepared byJames Stanley
To read more:
Are you looking for longer-term analysis on the U.S. Dollar? OurDailyFX Forecasts have a section for each major currency, and we also offer a plethora of resources onGoldorUSD -pairs such asEUR/USD ,GBP/USD ,USD/JPY ,AUD/USD . Traders can also stay up with near-term positioning via ourIG Client Sentiment Indicator .
Forex Trading Resources
DailyFX offers an abundance of tools, indicators and resources to help traders. For those looking for trading ideas, ourIG Client Sentimentshows the positioning of retail traders with actual live trades and positions. Ourtrading guidesbring our DailyFX Quarterly Forecasts and our Top Trading Opportunities; and ourreal-time news feedhas intra-day interactions from the DailyFX team. And if you're looking for real-time analysis, ourDailyFX Webinarsoffer numerous sessions each week in which you can see how and why we're looking at what we're looking at.
If you're looking for educational information, ourNew to FX guideis there to help new(er) traders while ourTraits of Successful Traders researchis built to help sharpen the skill set by focusing on risk and trade management.
--- Written by James Stanley, Strategist for DailyFX.com
Contact and follow James on Twitter:@JStanleyFX
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