The U.S. Dollar has started Q4 on a positive foot with a respectable showing on the first trading day of the quarter after a very rough start to 2017. That strength from yesterday lasted into the overnight session, at which point DXY made a quick attempt to test the August highs, but was met with seller resistance before the zone around 94 could come into play.
U.S. Dollar via ‘DXY’ Daily: Strong Start to Q4, Resistance Shows in Overnight Session
Chart prepared by James Stanley
On a shorter-term four-hour chart, we can see where Dollar bulls are trying to string together a test of that resistance around the 94-level. This is accented by a series of higher-highs and higher-lows that have developed over the past few weeks, and this helps to highlight how short-term support is beginning to show around prior resistance.
This could foreseeably become a bigger-picture move of USD-strength, but support structure above the 93.00 level would need to hold long enough for buyers to push prices in that area that runs from 94.08-94.30. If support at 93 cannot hold, we’re likely looking at another run of USD-weakness with an eventual re-test of the lows.
U.S. Dollar via ‘DXY’ Four-Hour: Support Structure, Break-Below 93 Opens Door for Deeper Losses
Chart prepared by James Stanley
EUR/USD Support Test
Going along with that quick move of USD-strength, we can see EUR/USD dipping within the support zone that runs from 1.1685-1.1736, at which point buyers stepped-in to offer a bit of support. If we do see USD-weakness take-over, the topside of EUR/USD would likely remain as attractive as we head towards a key ECB meeting later in October.
Chart prepared by James Stanley
The shorter-term charts of EUR/USD have yet to reflect a bullish trend. As we can see on the chart below, prices have put in a respectable bounce off of support around 1.1700, but at this stage, we have yet to take-out the prior swing-high, and until we do, the trend on this hourly chart reflects bearish price action.
