U.S. Dollar Price Action Setups: EUR/USD, USD/CAD, SPX

Article By:

, Sr. Strategist

Yesterday 7:15 PM

U.S. Dollar Talking Points:

- It was a strong Q4 for the U.S. Dollar and at this point there’s no sign of bulls letting up yet.

- As I shared in the webinar, I think it’s unlikely that both USD and equity strength remain in-play for the entirety of this year, and I expect the Dollar to mean-revert at some point. But for now, bulls have held higher-low support and there’s support potential down to the Fibonacci level of 106.61.

It was a big Q4 for the U.S. Dollar, and the currency has retained that strength so far through the 2025 open. While DXY was weak in Q3 of last year as the Fed laid the groundwork to start rate cuts in September, the Dollar came roaring back in Q4 as a combination of strong economic data, a less-dovish Fed and the election of Donald Trump all served to help strengthen the greenback.

As I shared in the webinar, I think that USD will mean-revert at some point but at this point, USD bulls remain in control and the currency has so far held higher-low support at a spot of prior resistance.

U.S. Dollar Daily Price Chart

Chart prepared by James Stanley; data derived from Tradingview

EUR/USD

Going along with the above look in the U.S. Dollar, EUR/USD has a similar but mirror image type of appeal. Sellers clearly remain in-control as given the continuation of lower-lows and lower-highs; but on a bigger picture basis, it’s the mean-reversion potential that’s most attractive to me.

For downside levels, the 1.0200 price is of interest as this is the 23.6% Fibonacci retracement from the same major move that helped to hold the high in 2023 at the 61.8% mark, and support-turned-resistance last year at the 38.2% retracement.

For longer-term mean-reversion scenarios, it’s the 1.0500-1.0611 zone of resistance that bulls will need to power through to exhibit a greater sense of control.

EUR/USD Daily Price Chart

Chart prepared by James Stanley; data derived from Tradingview

USD/CAD

USD/CAD has been strong ever since President-elect Trump has began to tease the prospect of tariffs on Canada. But this could come with consequence, especially considering that Canada’s largest export to the U.S. is energy. Tariffs on energy bring higher prices which could prod inflation in a number of ways, and that’s something that could further contribute to both USD strength and equity weakness.

If we do see USD mean reversion this year, USD/CAD is of interest as the pair is still within the nine-year-range that’s held in the pair. There’s overhead resistance at 1.4500 and then just inside of the 1.4700 level given the two prior swing-highs.

It’s the 1.4000 level that sellers will need to take out to exhibit greater control of the longer-term backdrop in the pair.

USD/CAD Weekly Price Chart

Chart prepared by James Stanley; data derived from Tradingview

SPX

I looked at U.S. equities as my top idea for 2025, after a pullback, and this seems to sync with what I looked at above in the USD.

At this point SPX remains strong such as we’ve seen in the post-election backdrop and to a larger degree since the early-August lows. But the prospect of fewer Fed cuts combined with strong inflation in the U.S. complicates matters.

SPX has had trouble sustaining drive over the 6k level and at this point there remains unfilled gap from the post-election breakout. There’s additional support potential in the 5639-5669 zone followed by the 5340-5402 zone. A continuation of near-term strength in the USD could further drive pullbacks in SPX; and around when we do see the USD reverse or pullback, there’s a few different notable areas of support for the S&P 500 index.

SPX Daily Price Chart

Chart prepared by James Stanley; data derived from Tradingview

--- written by James Stanley, Senior Strategist

U.S. Dollar Talking Points:

- It was a strong Q4 for the U.S. Dollar and at this point there’s no sign of bulls letting up yet.

- As I shared in the webinar, I think it’s unlikely that both USD and equity strength remain in-play for the entirety of this year, and I expect the Dollar to mean-revert at some point. But for now, bulls have held higher-low support and there’s support potential down to the Fibonacci level of 106.61.

- I’ll be looking at the U.S. Dollar from multiple vantage points in next week's webinar: Click here for registration information.

It was a big Q4 for the U.S. Dollar, and the currency has retained that strength so far through the 2025 open. While DXY was weak in Q3 of last year as the Fed laid the groundwork to start rate cuts in September, the Dollar came roaring back in Q4 as a combination of strong economic data, a less-dovish Fed and the election of Donald Trump all served to help strengthen the greenback.

As I shared in the webinar, I think that USD will mean-revert at some point but at this point, USD bulls remain in control and the currency has so far held higher-low support at a spot of prior resistance.

U.S. Dollar Daily Price Chart

Chart prepared by James Stanley; data derived from Tradingview

EUR/USD

Going along with the above look in the U.S. Dollar, EUR/USD has a similar but mirror image type of appeal. Sellers clearly remain in-control as given the continuation of lower-lows and lower-highs; but on a bigger picture basis, it’s the mean-reversion potential that’s most attractive to me.

For downside levels, the 1.0200 price is of interest as this is the 23.6% Fibonacci retracement from the same major move that helped to hold the high in 2023 at the 61.8% mark, and support-turned-resistance last year at the 38.2% retracement.

For longer-term mean-reversion scenarios, it’s the 1.0500-1.0611 zone of resistance that bulls will need to power through to exhibit a greater sense of control.

EUR/USD Daily Price Chart

Chart prepared by James Stanley; data derived from Tradingview

USD/CAD

USD/CAD has been strong ever since President-elect Trump has began to tease the prospect of tariffs on Canada. But this could come with consequence, especially considering that Canada’s largest export to the U.S. is energy. Tariffs on energy bring higher prices which could prod inflation in a number of ways, and that’s something that could further contribute to both USD strength and equity weakness.

If we do see USD mean reversion this year, USD/CAD is of interest as the pair is still within the nine-year-range that’s held in the pair. There’s overhead resistance at 1.4500 and then just inside of the 1.4700 level given the two prior swing-highs.

It’s the 1.4000 level that sellers will need to take out to exhibit greater control of the longer-term backdrop in the pair.

USD/CAD Weekly Price Chart

Chart prepared by James Stanley; data derived from Tradingview

SPX

I looked at U.S. equities as my top idea for 2025, after a pullback, and this seems to sync with what I looked at above in the USD.

At this point SPX remains strong such as we’ve seen in the post-election backdrop and to a larger degree since the early-August lows. But the prospect of fewer Fed cuts combined with strong inflation in the U.S. complicates matters.

SPX has had trouble sustaining drive over the 6k level and at this point there remains unfilled gap from the post-election breakout. There’s additional support potential in the 5639-5669 zone followed by the 5340-5402 zone. A continuation of near-term strength in the USD could further drive pullbacks in SPX; and around when we do see the USD reverse or pullback, there’s a few different notable areas of support for the S&P 500 index.

SPX Daily Price Chart

Chart prepared by James Stanley; data derived from Tradingview

--- written by James Stanley, Senior Strategist

U.S. Dollar Talking Points:

- It was a strong Q4 for the U.S. Dollar and at this point there’s no sign of bulls letting up yet.

- As I shared in the webinar, I think it’s unlikely that both USD and equity strength remain in-play for the entirety of this year, and I expect the Dollar to mean-revert at some point. But for now, bulls have held higher-low support and there’s support potential down to the Fibonacci level of 106.61.

- I’ll be looking at the U.S. Dollar from multiple vantage points in next week's webinar: Click here for registration information.

It was a big Q4 for the U.S. Dollar, and the currency has retained that strength so far through the 2025 open. While DXY was weak in Q3 of last year as the Fed laid the groundwork to start rate cuts in September, the Dollar came roaring back in Q4 as a combination of strong economic data, a less-dovish Fed and the election of Donald Trump all served to help strengthen the greenback.

As I shared in the webinar, I think that USD will mean-revert at some point but at this point, USD bulls remain in control and the currency has so far held higher-low support at a spot of prior resistance.

U.S. Dollar Daily Price Chart

Chart prepared by James Stanley; data derived from Tradingview

EUR/USD

Going along with the above look in the U.S. Dollar, EUR/USD has a similar but mirror image type of appeal. Sellers clearly remain in-control as given the continuation of lower-lows and lower-highs; but on a bigger picture basis, it’s the mean-reversion potential that’s most attractive to me.

For downside levels, the 1.0200 price is of interest as this is the 23.6% Fibonacci retracement from the same major move that helped to hold the high in 2023 at the 61.8% mark, and support-turned-resistance last year at the 38.2% retracement.

For longer-term mean-reversion scenarios, it’s the 1.0500-1.0611 zone of resistance that bulls will need to power through to exhibit a greater sense of control.

EUR/USD Daily Price Chart

Chart prepared by James Stanley; data derived from Tradingview

USD/CAD

USD/CAD has been strong ever since President-elect Trump has began to tease the prospect of tariffs on Canada. But this could come with consequence, especially considering that Canada’s largest export to the U.S. is energy. Tariffs on energy bring higher prices which could prod inflation in a number of ways, and that’s something that could further contribute to both USD strength and equity weakness.

If we do see USD mean reversion this year, USD/CAD is of interest as the pair is still within the nine-year-range that’s held in the pair. There’s overhead resistance at 1.4500 and then just inside of the 1.4700 level given the two prior swing-highs.

It’s the 1.4000 level that sellers will need to take out to exhibit greater control of the longer-term backdrop in the pair.

USD/CAD Weekly Price Chart

Chart prepared by James Stanley; data derived from Tradingview

SPX

I looked at U.S. equities as my top idea for 2025, after a pullback, and this seems to sync with what I looked at above in the USD.

At this point SPX remains strong such as we’ve seen in the post-election backdrop and to a larger degree since the early-August lows. But the prospect of fewer Fed cuts combined with strong inflation in the U.S. complicates matters.

SPX has had trouble sustaining drive over the 6k level and at this point there remains unfilled gap from the post-election breakout. There’s additional support potential in the 5639-5669 zone followed by the 5340-5402 zone. A continuation of near-term strength in the USD could further drive pullbacks in SPX; and around when we do see the USD reverse or pullback, there’s a few different notable areas of support for the S&P 500 index.

SPX Daily Price Chart

Chart prepared by James Stanley; data derived from Tradingview

--- written by James Stanley, Senior Strategist

U.S. Dollar Talking Points:

- It was a strong Q4 for the U.S. Dollar and at this point there’s no sign of bulls letting up yet.

- As I shared in the webinar, I think it’s unlikely that both USD and equity strength remain in-play for the entirety of this year, and I expect the Dollar to mean-revert at some point. But for now, bulls have held higher-low support and there’s support potential down to the Fibonacci level of 106.61.

- I’ll be looking at the U.S. Dollar from multiple vantage points in next week's webinar: Click here for registration information.

It was a big Q4 for the U.S. Dollar, and the currency has retained that strength so far through the 2025 open. While DXY was weak in Q3 of last year as the Fed laid the groundwork to start rate cuts in September, the Dollar came roaring back in Q4 as a combination of strong economic data, a less-dovish Fed and the election of Donald Trump all served to help strengthen the greenback.

As I shared in the webinar, I think that USD will mean-revert at some point but at this point, USD bulls remain in control and the currency has so far held higher-low support at a spot of prior resistance.

U.S. Dollar Daily Price Chart

Chart prepared by James Stanley; data derived from Tradingview

EUR/USD

Going along with the above look in the U.S. Dollar, EUR/USD has a similar but mirror image type of appeal. Sellers clearly remain in-control as given the continuation of lower-lows and lower-highs; but on a bigger picture basis, it’s the mean-reversion potential that’s most attractive to me.

For downside levels, the 1.0200 price is of interest as this is the 23.6% Fibonacci retracement from the same major move that helped to hold the high in 2023 at the 61.8% mark, and support-turned-resistance last year at the 38.2% retracement.

For longer-term mean-reversion scenarios, it’s the 1.0500-1.0611 zone of resistance that bulls will need to power through to exhibit a greater sense of control.

EUR/USD Daily Price Chart

Chart prepared by James Stanley; data derived from Tradingview

USD/CAD

USD/CAD has been strong ever since President-elect Trump has began to tease the prospect of tariffs on Canada. But this could come with consequence, especially considering that Canada’s largest export to the U.S. is energy. Tariffs on energy bring higher prices which could prod inflation in a number of ways, and that’s something that could further contribute to both USD strength and equity weakness.

If we do see USD mean reversion this year, USD/CAD is of interest as the pair is still within the nine-year-range that’s held in the pair. There’s overhead resistance at 1.4500 and then just inside of the 1.4700 level given the two prior swing-highs.

It’s the 1.4000 level that sellers will need to take out to exhibit greater control of the longer-term backdrop in the pair.

USD/CAD Weekly Price Chart

Chart prepared by James Stanley; data derived from Tradingview

SPX

I looked at U.S. equities as my top idea for 2025, after a pullback, and this seems to sync with what I looked at above in the USD.

At this point SPX remains strong such as we’ve seen in the post-election backdrop and to a larger degree since the early-August lows. But the prospect of fewer Fed cuts combined with strong inflation in the U.S. complicates matters.

SPX has had trouble sustaining drive over the 6k level and at this point there remains unfilled gap from the post-election breakout. There’s additional support potential in the 5639-5669 zone followed by the 5340-5402 zone. A continuation of near-term strength in the USD could further drive pullbacks in SPX; and around when we do see the USD reverse or pullback, there’s a few different notable areas of support for the S&P 500 index.

SPX Daily Price Chart

Chart prepared by James Stanley; data derived from Tradingview

--- written by James Stanley, Senior Strategist