Isn’t the USD looking strong of late?
Here is the EURUSD, daily chart:
Here is the AUDUSD, daily chart:
Here is the USDCHF, daily chart:
Here is the USDCAD, daily chart:
And here is something a little different. GBPUSD, daily chart:
Notice how the context of this market is very different from the others? The GBP has shown strength against the USD, while almost all the other markets have weakened significantly.
Underlying strength that goes against the overall trend is very valuable information. Let’s assume that we see a reason to sell the USD in the shorter to medium term, like if there was a weak jobs print on Friday’s NFP release.
Which pair would be best to trade, given a softer Dollar? I’d look to go long on the GBPUSD.
The 4-hour chart is working hard on setting up a potential trade for us:
Price is working it’s way to a point, however a close above resistance opens the way up 1.2550 and 1.2660.
The pattern isn’t complete.
We need to see price break out of this wedge (to either side), and then retest the wedge, from outside.
To the downside, 1.2400 would be an excellent target, followed up 1.2250 if price keeps going.