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US Dollar Prices Continue Support Bounce: USD/CHF, GBP/USD, AUD/USD

US Dollar Prices Continue Support Bounce: USD/CHF, GBP/USD, AUD/USD

2019-11-05 13:30:00
James Stanley, Currency Strategist
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US Dollar Price Outlook:

US Dollar Continues Support Bounce

So far this week the US Dollar has continued to bounce after last week’s revisit to the October lows. While there’s been a bit of help from counterparts out of Australia and Europe, the US currency hasn’t had much for drivers yet this week. That changes this morning at 10 AM with the release of non-manufacturing ISM data. This was a key driver last month when the print came-out inside of expectations, adding to the worry created by continued languish in the manufacturing portion of ISM. The most recent iteration of manufacturing ISM numbers were released last Friday just an hour-and-a-half after NFP’s and, once again, the print came-out inside of expectations, bringing bears back into the mix in a theme that largely held until last week’s close.

But so far this week the USD has continued to push-higher towards a batch of resistance that held the highs through a couple of different scenarios last week, including the Wednesday FOMC rate decision. Can the USD continue to push up for another test of this key zone? Or will this morning’s services ISM read help to bring back the bears along with the potential for fresh two-month-lows?

US Dollar Four-Hour Price Chart

us dollar four hour price chart usd

Chart prepared by James Stanley; US Dollar on Tradingview

USD/CHF Bounces in Range After Hold at .9850

I had looked at this one in last Thursday’s webinar and again in FX setups for this week; but the range in USD/CHF has held for almost a couple of months at this point with a fairly consistent streak of support showing around the .9850 level. The USD bounce has helped mean reversion remain on course and prices have already pushed up to the first target at the .9902 level. A little further ahead is range resistance around the .9950 level, after which additional targets could be sought on a re-test of the parity figure.

USD/CHF Four-Hour Price Chart

usdchf usd/chf eight hour price chart

Chart prepared by James Stanley; USDCHF on Tradingview

AUD/USD Reverts to Trendline Resistance

Last night’s RBA rate decision saw the bank avoid any near-term rate moves while not sounding quite so dovish. While the bank does expect a continued show of weak inflation, they also appear not to be in any hurry to cut rates or nudge policy into a looser spot anytime soon. In response AUD/USD jumped after the prior day’s sell-off, with price action reverting right back to the bearish trendline that connects December 2018 and April 2019 swing-highs. That trendline projection caught the high in late-July, just ahead of AUD/USD’s fresh ten-year-lows and has been back in-play over the past week.

Can buyers nudge above? And if so, will they be able to take-out the big fig of .7000 looming just overhead? This can be an attractive venue for those looking at elongated USD-strength, plotting for a bigger-picture reversal in AUD/USD and an eventual test of those decade-lows around the .6700-handle.

AUD/USD Daily Price Chart

audusd aud/usd aud usd price chart

Chart prepared by James Stanley; AUDUSD on Tradingview

GBP/USD Support Test After 1.3000

On that topic of big figures, GBP/USD ran into the 1.3000 handle a couple of weeks ago and buyers have been stymied ever since. Initially, this led to a bull flag formation and price action began to work outside of that formation last week as the US Dollar remained weak. But, GBP/USD bulls didn’t look to be interested in another 1.3000 test as a lower-high developed on Friday and that’s continued into this week as the USD has bounced.

This has brought a pullback to GBP/USD with buyers attempting to cauterize support at a key area on the chart around the 1.2900 handle. This keeps the pair as one of the more compelling short-USD themes at the moment, looking for that re-test of 1.2950 followed by a re-encroachment of the 1.3000 level.

GBP/USD Two-Hour Price Chart

gbpusd gbp/usd gbp usd two hour price chart

Chart prepared by James Stanley; GBPUSD on Tradingview

To read more:

Are you looking for longer-term analysis on the U.S. Dollar? Our DailyFX Forecasts have a section for each major currency, and we also offer a plethora of resources on Gold or USD-pairs such as EUR/USD, GBP/USD, USD/JPY, AUD/USD. Traders can also stay up with near-term positioning via our IG Client Sentiment Indicator.

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--- Written by James Stanley, Strategist for DailyFX.com

Contact and follow James on Twitter: @JStanleyFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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