US Dollar, GBP/USD Talking Points:
- The US Dollar[1] has continued to rally to fresh weekly highs, coming in stark contrast to the sell-off that dominated the currency into the 2019 close.
- GBP/USD[2] is trading lower this morning following some dovish comments from BoE Governor, Mark Carney. GBP[3]/USD[4] remains in a longer-term bull pennant formation with shorter-term support via prior resistance coming in to help hold the lows.
US Dollar Continues Rally
The US Dollar has continued to rally[5] over the past couple of days, extending a trend that runs in stark contrast to the way the currency closed 2019 trade. While the USD plunged to a fresh five-month-low on the final trading day of last year, an area of support came in to help hold the lows; and after a bit of gyration near that support, buyers have begun to claw back December losses in the currency.
I had looked into this one in Tuesday’s webinar[6], highlighting a short-term ascending triangle pattern. Such formations will often be approached with the aim of bullish breakouts, owed to the deductive nature of higher-low support coming in along with a horizontal level of resistance, indicating a waning impact from sellers at resistance as buyers get more and more anticipatory of bullish potential. That presented a situation in which long-term support was coupled with a short-term bullish pattern, which would still be considered counter-trend in nature given the veracity of the US Dollar’s Q4 sell-off.
US Dollar Four-Hour Price Chart
Chart prepared by James Stanley[7]; US Dollar on Tradingview[8]
The next operative question is generally, where to next? And sitting ahead on the chart is a very obvious zone of
