U.S. Dollar Deeper Pullback Potential as EUR/USD Tests 1.0500

Gold, USD, EUR/USD Talking Points:

• The U.S. Dollar continues to hold deeper pullback potential, and this week is key for that theme as the currency is currently showing an evening star formation on the monthly chart.
• In a mirror image of that, EUR/USD is working on a morning star formation but hasn’t yet been able to breach the 1.0500 level in the pair. Above that, a confluent spot of Fibonacci levels shows around 1.0610.
• USD/CAD remains at the forefront for tariff themes, and the pair is showing short-term bullish price action which could make it one of the more attractive pairs for bullish USD setups.

Video

As highlighted going into the weekend, the tariff topic is not over yet and at this point there’s shuffling across markets as the next major date in that theme comes to the forefront this Saturday, March the 1^st. This is when tariffs are set to come into effect on Canada and Mexico, and markets were reminded of this from President Trump yesterday when he said that they were still on track for that date.

USD/CAD has pulled back from recent lows and is currently testing resistance as taken from prior support, from around 1.4280-1.4300, with deeper resistance overhead at 1.4371 and around the 1.4500 handle.

As shown in the webinar, there’s shorter-term bullish structure here and given the Saturday deadline for tariffs, this could be one of the more attractive pairs to work with USD-strength, looking for those deeper resistance levels to come into play.

USD/CAD Daily Price Chart

U.S. Dollar Pullback Potential

In last week’s webinar, I was looking for lower-high resistance at 107.35 in DXY and that worked out well as that level helped to mark the weekly high. Price then went on to set a fresh low with a test below 106.61, and that weakness has so far continued into this week. DXY is currently testing the 38.2% retracement of the Q4 rally and the next few days are key for this theme as the monthly chart is working on an evening star pattern.

For sellers to retain bearish momentum, they need to hold highs below 107.35, and if they can’t, the next level of resistance is the 23.6% retracement of the Q4 rally at 107.81. If that price comes into play we’ll probably also be seeing a deeper dip in EUR/USD as that pair tangles with the 1.0500 level again.

U.S. Dollar Daily Price Chart

EUR/USD

EUR/USD continues to battle it out at the 1.0500 level and today is showing yet another test at the big figure. If we are going to see a deeper pullback in USD, EUR/USD will need to press a breakout and as looked at in the webinar, there’s been a continuation of higher-lows posting in the pair so far this month.

For bullish momentum, buyers need to hold support above the level looked at last week at 1.0406, and preferably above the 61.8% retracement of the shorter-term move at 1.0457.

EUR/USD Daily Price Chart

--- written by James Stanley, Senior Strategist

Gold, USD, EUR/USD Talking Points:

• The U.S. Dollar continues to hold deeper pullback potential, and this week is key for that theme as the currency is currently showing an evening star formation on the monthly chart.
• In a mirror image of that, EUR/USD is working on a morning star formation but hasn’t yet been able to breach the 1.0500 level in the pair. Above that, a confluent spot of Fibonacci levels shows around 1.0610.
• USD/CAD remains at the forefront for tariff themes, and the pair is showing short-term bullish price action which could make it one of the more attractive pairs for bullish USD setups.

As highlighted going into the weekend, the tariff topic is not over yet and at this point there’s shuffling across markets as the next major date in that theme comes to the forefront this Saturday, March the 1^st. This is when tariffs are set to come into effect on Canada and Mexico, and markets were reminded of this from President Trump yesterday when he said that they were still on track for that date.

USD/CAD has pulled back from recent lows and is currently testing resistance as taken from prior support, from around 1.4280-1.4300, with deeper resistance overhead at 1.4371 and around the 1.4500 handle.

As shown in the webinar, there’s shorter-term bullish structure here and given the Saturday deadline for tariffs, this could be one of the more attractive pairs to work with USD-strength, looking for those deeper resistance levels to come into play.

 

USD/CAD Daily Price Chart

Chart prepared by James Stanley; data derived from Tradingview

 

U.S. Dollar Pullback Potential

 

In last week’s webinar, I was looking for lower-high resistance at 107.35 in DXY and that worked out well as that level helped to mark the weekly high. Price then went on to set a fresh low with a test below 106.61, and that weakness has so far continued into this week. DXY is currently testing the 38.2% retracement of the Q4 rally and the next few days are key for this theme as the monthly chart is working on an evening star pattern.

For sellers to retain bearish momentum, they need to hold highs below 107.35, and if they can’t, the next level of resistance is the 23.6% retracement of the Q4 rally at 107.81. If that price comes into play we’ll probably also be seeing a deeper dip in EUR/USD as that pair tangles with the 1.0500 level again.

 

U.S. Dollar Daily Price Chart

Chart prepared by James Stanley; data derived from Tradingview

 

EUR/USD

 

EUR/USD continues to battle it out at the 1.0500 level and today is showing yet another test at the big figure. If we are going to see a deeper pullback in USD, EUR/USD will need to press a breakout and as looked at in the webinar, there’s been a continuation of higher-lows posting in the pair so far this month.

For bullish momentum, buyers need to hold support above the level looked at last week at 1.0406, and preferably above the 61.8% retracement of the shorter-term move at 1.0457.

EUR/USD Daily Price Chart

Chart prepared by James Stanley; data derived from Tradingview

 

--- written by James Stanley, Senior Strategist