Pre-NFP USD Price Action Setups: EUR/USD, USD/JPY, USD/CAD

Article By:

, Sr. Strategist

October 31, 2024 6:41 PM

NFP, US Dollar Talking Points:

The US Dollar has finally found some resistance and despite some positive data this week, DXY has continued to pullback.
The currency has now started re-test of a key spot of support at 103.82, which is also the 200-day moving average.
NFP is somewhat unique in that it’s an early look at the most recently completed month and as such, it can bring strong volatility across markets, especially FX. As a case in point, it was last month’s print on October 4^th when the USD bullish trend really started to heat up.

The US Dollar has continued to pull back and price has now re-tested the next zone of support that I’ve been talking about at 103.82. This is the 200-day moving average and until this morning, it hadn’t been tested much for support since last week’s breakout.

With that said, the pullback has been somewhat tenuous thus far, with buyers initially holding strong at the 104-104.07 zone, even despite overbought conditions on the daily chart. In the video and in this article, I want to look at a couple of different scenarios on each side of the USD in effort of planning around the Non-farm Payrolls report.

At this point, USD price action from the daily chart remains bullish, with a fresh higher-high holding over three tests at the 104.57 level. The price of 103.82 could play as higher-low support but that’ll likely depend on tomorrow’s jobs report out of the US. If that comes out with strength, we can see further pricing-out of expected US rate cuts from the Fed. If it comes out with weakness markets will likely remain warm to the idea that the Fed will continue cutting at next week’s meeting and through the end of 2025.

For deeper support, the next zone below the 200-dma is the same support that was in-play two weeks ago, following the initial resistance inflection at the 200-day moving average. That plots between Fibonacci levels at 103.32 and 103.46.

For next resistance, 104.57 is somewhat obvious but shorter-term, there’s a Fibonacci level at 104.38. Those are followed by a prior price action swing at 104.80 and then a major level with confluence from a few different mechanisms around the 105.00 handle.

US Dollar Daily Price Chart

Chart prepared by James Stanley; data derived from Tradingview

EUR/USD

The Euro is 57.6% of the DXY quote so there’s often a mirror image-like dynamic at play there. And as the USD hit that resistance at 104.57 last week, EUR/USD tested a major spot at 1.0765 at the same time.

I looked into that support in EUR/USD before hand in last Tuesday’s webinar, and while the initial bounce was mild, buyers have continued to push.

The next natural zone of resistance in the pair was the 1.0862-1.0872 zone, with the latter price functioning as the 200-dma. That zone has since held the highs and from the daily chart, the current formation is a doji, which highlights a bit of indecision after the bounce.

For USD-strength scenarios, I’m still partial to EUR/USD and the pullback that’s been seen over the past week could potentially be enough for bears to drive continuation scenarios. But I think they’ll need some help from tomorrow’s NFP report to keep that tune going.

If we don’t see that, however, I think there could be more amenable pastures for USD-weakness elsewhere, which I’ll look at below. In EUR/USD, my next resistance is at 1.0900 and then a key zone from 1.0943-1.0960.

EUR/USD Daily Price Chart

Chart prepared by James Stanley, EUR/USD on Tradingview

USD/JPY

When the USD was flying higher into last week, so was USD/JPY. The pair put in a very respectable move when breaking out above the prior resistance level of 151.95 and, so far, that price has held for support after Fibonacci resistance at 153.40 has played.

But – given those dynamics, if we are seeing a strong pullback in the USD on the back of NFP tomorrow, I think that’ll come along with a similar drive around US rates. And that’s something that could impact USD/JPY.

From a price action perspective, the 151.95 level has so far held the lows after the pullback move. But resistance has held at prior short-term support and, at this point, 151.95 looks vulnerable for a re-test.

If we do see the USD pullback deepen, perhaps down to that 103.36-103.42 zone, deeper pullback potential remains in USD/JPY with focus on 150.77 or perhaps even as deep as the 150.00 handle.

USD/JPY Four-Hour Price Chart

Chart prepared by James Stanley, USD/JPY on Tradingview

USD/CAD

USD/CAD is near some historically rigid resistance…

As USD strength came alive in early-Q4, USD/CAD started a strong bullish run that’s largely continued through this morning’s trade.

Price has just put in re-test of the two-year high in the pair at 1.3947 and that has so far held the highs for today.

I’ve talked a lot about this premise but for a natural cross like USD/CAD, there can be a tendency for major psychological levels to hold price inflections. And one key reason is the actual function of the currencies as businesses in both the US and Canada can and often will take notice of a test of a level like 1.4000. At that point, the USD seems expensive and the CAD cheap, and in response, businesses will react.

And perhaps that has some play in the next couple of weeks. But more important for my aim is the fact that the past few days have seen buyers soften the run as the 1.3947 level has approached and with that setting the high so far today, it sets the pair up as somewhat attractive for USD-weakness scenarios.

I’m tracking support at 1.3822 which can be spanned up to the prior swing high of 1.3856. If sellers can start to push below that, then we may be looking at a larger USD reversal. But for now, that’s the first area of focus for pullback plays in USD around tomorrow’s Non-farm Payrolls.

USD/CAD Daily Price Chart

Chart prepared by James Stanley, USD/CAD on Tradingview

--- written by James Stanley, Senior Strategist

NFP, US Dollar Talking Points:

The US Dollar has finally found some resistance and despite some positive data this week, DXY has continued to pullback.
The currency has now started re-test of a key spot of support at 103.82, which is also the 200-day moving average.
NFP is somewhat unique in that it’s an early look at the most recently completed month and as such, it can bring strong volatility across markets, especially FX. As a case in point, it was last month’s print on October 4^th when the USD bullish trend really started to heat up.

Video

The US Dollar has continued to pull back and price has now re-tested the next zone of support that I’ve been talking about at 103.82. This is the 200-day moving average and until this morning, it hadn’t been tested much for support since last week’s breakout.

With that said, the pullback has been somewhat tenuous thus far, with buyers initially holding strong at the 104-104.07 zone, even despite overbought conditions on the daily chart. In the video and in this article, I want to look at a couple of different scenarios on each side of the USD in effort of planning around the Non-farm Payrolls report.

At this point, USD price action from the daily chart remains bullish, with a fresh higher-high holding over three tests at the 104.57 level. The price of 103.82 could play as higher-low support but that’ll likely depend on tomorrow’s jobs report out of the US. If that comes out with strength, we can see further pricing-out of expected US rate cuts from the Fed. If it comes out with weakness markets will likely remain warm to the idea that the Fed will continue cutting at next week’s meeting and through the end of 2025.

For deeper support, the next zone below the 200-dma is the same support that was in-play two weeks ago, following the initial resistance inflection at the 200-day moving average. That plots between Fibonacci levels at 103.32 and 103.46.

For next resistance, 104.57 is somewhat obvious but shorter-term, there’s a Fibonacci level at 104.38. Those are followed by a prior price action swing at 104.80 and then a major level with confluence from a few different mechanisms around the 105.00 handle.

US Dollar Daily Price Chart

Chart prepared by James Stanley; data derived from Tradingview

EUR/USD

The Euro is 57.6% of the DXY quote so there’s often a mirror image-like dynamic at play there. And as the USD hit that resistance at 104.57 last week, EUR/USD tested a major spot at 1.0765 at the same time.

I looked into that support in EUR/USD before hand in last Tuesday’s webinar, and while the initial bounce was mild, buyers have continued to push.

The next natural zone of resistance in the pair was the 1.0862-1.0872 zone, with the latter price functioning as the 200-dma. That zone has since held the highs and from the daily chart, the current formation is a doji, which highlights a bit of indecision after the bounce.

For USD-strength scenarios, I’m still partial to EUR/USD and the pullback that’s been seen over the past week could potentially be enough for bears to drive continuation scenarios. But I think they’ll need some help from tomorrow’s NFP report to keep that tune going.

If we don’t see that, however, I think there could be more amenable pastures for USD-weakness elsewhere, which I’ll look at below. In EUR/USD, my next resistance is at 1.0900 and then a key zone from 1.0943-1.0960.

EUR/USD Daily Price Chart

Chart prepared by James Stanley, EUR/USD on Tradingview

USD/JPY

When the USD was flying higher into last week, so was USD/JPY. The pair put in a very respectable move when breaking out above the prior resistance level of 151.95 and, so far, that price has held for support after Fibonacci resistance at 153.40 has played.

But – given those dynamics, if we are seeing a strong pullback in the USD on the back of NFP tomorrow, I think that’ll come along with a similar drive around US rates. And that’s something that could impact USD/JPY.

From a price action perspective, the 151.95 level has so far held the lows after the pullback move. But resistance has held at prior short-term support and, at this point, 151.95 looks vulnerable for a re-test.

If we do see the USD pullback deepen, perhaps down to that 103.36-103.42 zone, deeper pullback potential remains in USD/JPY with focus on 150.77 or perhaps even as deep as the 150.00 handle.

USD/JPY Four-Hour Price Chart

Chart prepared by James Stanley, USD/JPY on Tradingview

USD/CAD

USD/CAD is near some historically rigid resistance…

As USD strength came alive in early-Q4, USD/CAD started a strong bullish run that’s largely continued through this morning’s trade.

Price has just put in re-test of the two-year high in the pair at 1.3947 and that has so far held the highs for today.

I’ve talked a lot about this premise but for a natural cross like USD/CAD, there can be a tendency for major psychological levels to hold price inflections. And one key reason is the actual function of the currencies as businesses in both the US and Canada can and often will take notice of a test of a level like 1.4000. At that point, the USD seems expensive and the CAD cheap, and in response, businesses will react.

And perhaps that has some play in the next couple of weeks. But more important for my aim is the fact that the past few days have seen buyers soften the run as the 1.3947 level has approached and with that setting the high so far today, it sets the pair up as somewhat attractive for USD-weakness scenarios.

I’m tracking support at 1.3822 which can be spanned up to the prior swing high of 1.3856. If sellers can start to push below that, then we may be looking at a larger USD reversal. But for now, that’s the first area of focus for pullback plays in USD around tomorrow’s Non-farm Payrolls.

USD/CAD Daily Price Chart

Chart prepared by James Stanley, USD/CAD on Tradingview

--- written by James Stanley, Senior Strategist

NFP, US Dollar Talking Points:

The US Dollar has finally found some resistance and despite some positive data this week, DXY has continued to pullback.
The currency has now started re-test of a key spot of support at 103.82, which is also the 200-day moving average.
NFP is somewhat unique in that it’s an early look at the most recently completed month and as such, it can bring strong volatility across markets, especially FX. As a case in point, it was last month’s print on October 4^th when the USD bullish trend really started to heat up.

Video

The US Dollar has continued to pull back and price has now re-tested the next zone of support that I’ve been talking about at 103.82. This is the 200-day moving average and until this morning, it hadn’t been tested much for support since last week’s breakout.

With that said, the pullback has been somewhat tenuous thus far, with buyers initially holding strong at the 104-104.07 zone, even despite overbought conditions on the daily chart. In the video and in this article, I want to look at a couple of different scenarios on each side of the USD in effort of planning around the Non-farm Payrolls report.

At this point, USD price action from the daily chart remains bullish, with a fresh higher-high holding over three tests at the 104.57 level. The price of 103.82 could play as higher-low support but that’ll likely depend on tomorrow’s jobs report out of the US. If that comes out with strength, we can see further pricing-out of expected US rate cuts from the Fed. If it comes out with weakness markets will likely remain warm to the idea that the Fed will continue cutting at next week’s meeting and through the end of 2025.

For deeper support, the next zone below the 200-dma is the same support that was in-play two weeks ago, following the initial resistance inflection at the 200-day moving average. That plots between Fibonacci levels at 103.32 and 103.46.

For next resistance, 104.57 is somewhat obvious but shorter-term, there’s a Fibonacci level at 104.38. Those are followed by a prior price action swing at 104.80 and then a major level with confluence from a few different mechanisms around the 105.00 handle.

US Dollar Daily Price Chart

Chart prepared by James Stanley; data derived from Tradingview

EUR/USD

The Euro is 57.6% of the DXY quote so there’s often a mirror image-like dynamic at play there. And as the USD hit that resistance at 104.57 last week, EUR/USD tested a major spot at 1.0765 at the same time.

I looked into that support in EUR/USD before hand in last Tuesday’s webinar, and while the initial bounce was mild, buyers have continued to push.

The next natural zone of resistance in the pair was the 1.0862-1.0872 zone, with the latter price functioning as the 200-dma. That zone has since held the highs and from the daily chart, the current formation is a doji, which highlights a bit of indecision after the bounce.

For USD-strength scenarios, I’m still partial to EUR/USD and the pullback that’s been seen over the past week could potentially be enough for bears to drive continuation scenarios. But I think they’ll need some help from tomorrow’s NFP report to keep that tune going.

If we don’t see that, however, I think there could be more amenable pastures for USD-weakness elsewhere, which I’ll look at below. In EUR/USD, my next resistance is at 1.0900 and then a key zone from 1.0943-1.0960.

EUR/USD Daily Price Chart

Chart prepared by James Stanley, EUR/USD on Tradingview

USD/JPY

When the USD was flying higher into last week, so was USD/JPY. The pair put in a very respectable move when breaking out above the prior resistance level of 151.95 and, so far, that price has held for support after Fibonacci resistance at 153.40 has played.

But – given those dynamics, if we are seeing a strong pullback in the USD on the back of NFP tomorrow, I think that’ll come along with a similar drive around US rates. And that’s something that could impact USD/JPY.

From a price action perspective, the 151.95 level has so far held the lows after the pullback move. But resistance has held at prior short-term support and, at this point, 151.95 looks vulnerable for a re-test.

If we do see the USD pullback deepen, perhaps down to that 103.36-103.42 zone, deeper pullback potential remains in USD/JPY with focus on 150.77 or perhaps even as deep as the 150.00 handle.

USD/JPY Four-Hour Price Chart

Chart prepared by James Stanley, USD/JPY on Tradingview

USD/CAD

USD/CAD is near some historically rigid resistance…

As USD strength came alive in early-Q4, USD/CAD started a strong bullish run that’s largely continued through this morning’s trade.

Price has just put in re-test of the two-year high in the pair at 1.3947 and that has so far held the highs for today.

I’ve talked a lot about this premise but for a natural cross like USD/CAD, there can be a tendency for major psychological levels to hold price inflections. And one key reason is the actual function of the currencies as businesses in both the US and Canada can and often will take notice of a test of a level like 1.4000. At that point, the USD seems expensive and the CAD cheap, and in response, businesses will react.

And perhaps that has some play in the next couple of weeks. But more important for my aim is the fact that the past few days have seen buyers soften the run as the 1.3947 level has approached and with that setting the high so far today, it sets the pair up as somewhat attractive for USD-weakness scenarios.

I’m tracking support at 1.3822 which can be spanned up to the prior swing high of 1.3856. If sellers can start to push below that, then we may be looking at a larger USD reversal. But for now, that’s the first area of focus for pullback plays in USD around tomorrow’s Non-farm Payrolls.

USD/CAD Daily Price Chart

Chart prepared by James Stanley, USD/CAD on Tradingview

--- written by James Stanley, Senior Strategist