Weekly Technical Trade Levels on USD Majors, Commodities & Stocks
- USD technical trade setups we are tracking this week into the monthly close
- Next Weekly Strategy Webinar: Monday, February 2 at 8:30am ET
- Review the latest Video Updates or Stream Live on my YouTube playlist
In this webinar we take an in-depth look at the technical trade levels for the US Dollar (DXY), Euro (EUR/USD), British Pound (GBP/USD), Australian Dollar (AUD/USD), Canadian Dollar (USD/CAD), Japanese Yen (USD/JPY), Swiss Franc (USD/CHF), Gold (XAU/USD), Silver (XAG/USD), Crude Oil (WTI), Bitcoin (BTC/USD), and Equity Indices (SXP500, NDX, DJI). These are the levels that matter on the technical charts into the weekly open.
US Dollar Price Chart – USD 240min (DXY)
Chart Prepared by Michael Boutros, Sr. Technical Strategist; DXY on TradingView
Notes: The Dollar Index crashed through key support last week at the January range low and the yearly open at 98.15/24. The subeseuqnet decline has now extended more than 2.6% off the monthly high with price now approaching confluent support at 96.85- a region defined by the 100% extension of the November decline and the 1.618% extension January decline. Note that the lower parallel of descending pitchfork converges on this zone today and a break / daily close below will be needed to fuel the next major leg of the decline towards the 2025 low / July lows at 96.22/38.
Initial resistance is eyed at Friday’s close at 97.45 and is backed by the 2018 swing high and the 61.8% retracement of the September advance at 97.71/81. Broader bearish invalidation is now lowered to the objective yearly open at 98.24- a breach / close above this level would be needed to suggest a more significant low is in place and a larger trend reversal is underway.
Bottom line: The US Dollar collapse is now testing near-term downtrend support- looking for a reaction off this mark today. From a trading standpoint, rallies should be limited to 97.81 IF price is heading lower on this stretch with a close below needed to fuel the next major leg of the decline.
Keep in mind the FOMC rate decision is on tap Wednesday and although the central bank is widely expected to leave rates unchanged, trader will be focused on Chair Powells subsequent remarks. In his last presser, Powell stated that there were risks on both sides of the mandate, and if the commentary highlights an increased focus on the inflation front, the markets may have to reprice expectations for two rate cuts this year. Fed fund futures are currently pricing a 71% chance that the central bank will be on hold through April with a 60% chance the first rate cut of the year will be delivered at the June rate decision.
Canadian Dollar Price Chart – USD/CAD 240min
Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/CAD on TradingView
Notes: USD/CAD crashed through median-line support on Friday with the decline extending more than 1.8% off the monthly high. Initial support is being tested today at the 78.6% retracement of the June advance and the December low-day close (LDC) at 1.3669/73. A break below / close below this threshold would expose subsequent objectives at the December low at 1.3642 and the 88.6% retracement near 1.3609.
Initial resistance is now eyed at the 1.3722/27- a region defined by the September / August low and the objective yearly open. Near-term bearish invalidation is now lowered to the 61.8% retracement of the late-December rally at 1.3752. Note that the median-line converges on this threshold over the next few days and a breach / close above this slope is needed to suggest a more significant low is in place.
Bottom line: The USD/CAD breakdown is testing a near-term support pivot into the start of the week. From a trading standpoint, recoveries should be limited to 1.3752 IF price is heading lower on this stretch with a close below 1.3669 needed to fuel the next leg of the decline.
Keep in mind we the Bank of Canada interest rate decision is on tap just ahead of the Fed on Wednesday with the central bank widely expected to leave rate unchanged. Stay nimble into the release and watch the weekly close here for guidance. Review my latest Canadian Dollar Forecast for a closer look at the longer-term USD/CAD technical trade levels.
Economic Calendar – Key Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
--- Written by Michael Boutros, Senior Technical Strategist
Follow Michael on X @MBForex
