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

US Dollar, EUR/USD, GBP/USD, AUD/USD Price Analysis:

US Dollar Reverts to Support

The US Dollar has moved back to a key zone of support following last week’s test in the same area. This is the same zone of prices that helped to set the three-month-low in June, spanning from 95.86-96.05 on the DXY chart.

Given the increasing frequency of tests with the lower-highs that have continued to post, and the USD may be carrying breakout potential as we move deeper into Q3 trade. Bears are continuing to press the matter but, as yet, price action hasn’t been able to test below that June swing low. On the below two-hour chart, the lower-highs that have been posting since the Q3 open are highlighted by two red trendlines. The support zone in question, highlighted in blue, is now facing its third test since the June open.

US Dollar Two-Hour Price Chart

Chart prepared by James Stanley; USD, DXY on Tradingview

US Dollar Bigger Picture

Taking a step back on the chart and we can see how this same zone has been in-play on the US Dollar for the past couple of years. Notably, this area of prices helped to set the low in DXY on multiple occasions in 2019, including February, March and then again in June. It came back into the equation this March, as the coronavirus was getting priced-in; and while price action did test below this area, that theme was brief, and bulls quickly pushed prices back above this key spot on the chart.

The big question: As coronavirus new cases swell and as expectations for a continued dovish outlook from the FOMC permeate the backdrop – will USD bears be able to finally push below this area on the chart for a lasting move? The answer to that will likely be at least partly associated with whether or not bulls can grab ahold of the Euro, and we’ll investigate that in our next set of charts.

US Dollar Weekly Price Chart

Chart prepared by James Stanley; USD, DXY on Tradingview

EUR/USD Returns to Resistance, EU Summit Looms Large

This morning’s ECB rate decision brought little by the way of new information; but EUR/USD did show a quick move back up to a key spot of resistance. Perhaps the more interesting item on the horizon is the EU Summit, where there is certainly the opportunity for some new information to filter into markets. This may, however, present some gap risk as that Summit spans into the weekend after many markets have already closed down.

The big spot of emphasis on the pair is the 1.1446-1.1500 zone which, similar to the 95.86-96.05 zone on DXY above, has been in play for more than a year. The notable exception being that this zone hasn’t been violated in over a year; and the March outlay of volatility saw price action remain inside of the 1.1500 handle.

Will EUR/USD bulls bid the pair after next week’s open on the results of the EU summit? Or will this key zone hold yet another inflection before prices…