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US dollar bounces back towards recent highs

The US dollar has been mostly range-bound for a year now. As you can see in the daily chart below, the US Dollar Index has been held by a gently upward-sloping channel, and has recently recovered towards the upper end of the range.

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With no clear trend to follow, swing trades for more than a day or two are a thing of the past. Traders must focus on short-term volatility for scalping opportunities.

AUD/USD has moved sideways in a 48-pip range all this week.

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If AUD/USD holds minor resistance at 0.6775/80 we target two-week trendline support at 0.6745/40. Be ready to sell a break below 0.6735, targeting 0.6720 and support at 0.6685/75. Try long positions with stops below 0.6660. A break lower is an important sell signal initially targeting 0.6610/00 and 0.6560/50.

Holding above 0.6780 targets a selling opportunity at 0.6820/30. Place stops above 0.6840. A break higher is a buy signal targeting 6876/80 and strong resistance at 0.6910/20. Try shorts with stops above 0.6935.

NZD/USD has moved lower this week as we held resistance at 0.6435/40 to target 0.6420, and yesterday hit eight pips above support at the August low (so far) at 0.6385/75. Long positions need stops below 0.6360. A break lower is an important sell signal initially targeting 0.6345/40, then 0.6305/00.

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The first resistance is at 0.6415/25, but a move above 0.6435 targets a selling opportunity at 0.6475/80, with stops above 0.6490. A break higher initially targets 0.6535.

For USD/JPY the key resistance is at 106.75/85, and short positions here need stops above 107.00. A break higher is a buy signal targeting 107.20/25 and 107.35/40, perhaps as far as strong resistance at 107.65/70.

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Holding key resistance at 106.75/85 targets minor support at 106.45/40 and again at 106.10/00. A break lower is a sell signal targeting 105.80/70 and 105.45 before important support at the January (and 2018) low at 104.95/65. Buy with stops below 104.30.

EUR/USD holds the only support at 1.1075/65 so far this week. Another bounce re-targets 1.1110/16. A break higher meets many barriers which have built up with the long sideways trend over the past few months.

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There is strong resistance at 1.1145/50, again at 1.1170/80 and then again at 1.1215/20. Bulls need a breakout above 1.1230 for the chance of a trend to follow.

The only support today is at 1.1075/65. A break below 1.1055 re-tests the 1.1025 low. A break below here is a sell signal targeting 1.1000/1.0995 and important 21-month trendline support at 1.0975/65.

USD/CAD holds support at 1.3260/70 to hit the 1.3300/03 level. Resistance at 1.3330/40 held so well all through August, but is more likely to be broken now. Place stops above 1.3355. A break higher is a buy signal targeting 1.3370, 1.3390 and 1.3420/30.

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Try long positions at the support level at 1.3270/60 with stops below 1.3250. A break lower is a sell signal targeting 1.3225/15, perhaps as far as 1.3185/75. Further losses meet good support at 1.3145/40.

Jason Sen

Technical Analyst & Trader

For more information and trading education visit Intertrader

The content of this article is the personal opinion of the author and not Intertrader. You should under no circumstances consider the information and comments provided as an offer or solicitation to invest. This is not investment advice. The information provided is believed to be accurate at the date the information is produced.

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