Tomorrow brings U.S. Non-Farm Payrolls, and then next Wednesday brings a Federal Reserve rate decision with a widely-expected rate hike. Over the next week, the U.S. Dollar will likely remain in-focus.

This comes after a year that’s been tough for Dollar bulls: After coming into 2017 riding the wave of the ‘Reflation Trade’, the Greenback turned around in the first quarter and never really looked back. By September 8th, the U.S. Dollar had lost -12.33% from the high set on January 3rd, and there were few expectations for any cessation of that weakness. But as we moved through the remainder of September and early-October, we price action start to show some semblance of strength. When the ECB extended their QE program into 2018, the Dollar finally caught some element of a bid to set a fresh three-month-high; but that was short-lived as Dollar bears just ended up punching prices back down into the prior range just a few weeks later.

U.S. Dollar via ‘DXY’ Daily: 2017 Down-Trend Continues as Prices Unable to Hold Above Resistance

Chart prepared by James Stanley

Since then, we’ve been waiting for the Dollar to show some element of direction. This has started to show over the past couple of days as price action has started to tip-toe higher on the chart. But we’re fast approaching an area that has been a key decision point on the U.S. Dollar this year; and we’re referring to a zone that exists between the prices of 94.08 and 94.30. If the U.S. Dollar is able to re-engage above this level, the door can open for bullish exposure as we move towards year-end.

USD Four-Hour: Two-Week Highs with Price Action Fast Approaching Key Zone 94.08-94.30

Chart prepared by James Stanley

EUR/USD – Sliding Scales of Support

As USD-strength has started to show a bit more of recent, the retracement in EUR/USD has deepened. We looked at this in-depth yesterday, and the setup is very similar with a slightly deeper retracement.