Forex Trading Insights: Dollar Pullback Setup 9-29-23


I. Introduction

II. Dollar Price Action and Analysis

  • Dollar pullback began before GDP report
  • Called for dollar to stay under 75 cents but above quarter off neutral news
  • Dip below range before news on Fed rate hike fears
  • But Fed Powell meeting was good for dollar
  • Showcased personality and responsibility
  • Prepares traders for potential volatile reaction to upcoming economic data

III. Expected Bearish Economic Data on Friday

  • 8:30 AM Core PCE, goods trade balance, consumer sentiment expected lower
  • Likely dollar drop targets 105.75 former support
  • But still up on the week, would extend 11 week run
  • Needs to hold 105.75 to avoid reversal

IV. Other Currency Pairs

  • EUR/USD flagging below 1.06 resistance
  • GBP/USD nearing 1.225 after rally this week
  • AUD/USD at weekly open after drop from highs
  • NZD/USD facing minor resistance at quarter level
  • USD/JPY holding 149 support so far
  • 148.75 support level to watch on pullback

V. Keywords:

  • Dollar index, DXY, pullback, Fed, Jerome Powell, dovish, hawkish
  • Inflation data, Core PCE, goods trade balance
  • Consumer sentiment, stock market reaction
  • Major forex pairs, technical analysis, support, resistance
  • Weekly opens, economic calendar, CPI, interest rates

VI. Conclusion

  • Upcoming US data expected negative for dollar
  • But overall uptrend intact barring sharp breakdown
  • Other dollar pairs showing potential for bounce
  • Need to monitor key support levels on Friday


So what we see here for the dollar is that the dollar did have a nice pullback today but the pullback did begin even before the report came out. So before the GDP report came out the dollar was already pulling back.

We got the pullback towards this 106 mark, the mark that we were calling for as far as on Wednesday beforeThursday even came. We were calling for it to stay underneath the 75 cent but still above a quarter. And as far as that being the range off of the news because of the expectation for it to be neutral we did get a dipping slightly below that before the news even came out.

And then after that, that’s when a greater dip happened. But that dip was more so because of fear of what could potentially happen. As far as with Powell, but with Fed Powell, even with that meeting, that meeting actually was avery good meeting.

It was a meeting of him with teachers and so it got a chance to really showcase his personality. He really got a chance to shine as a person. And I think that that type of stuff is really important for members like himself to really shine as a person.

Because as he gets a chance to shine as a person, then as people get a chance to see who he is, kind of what he likes doing, that he’s actually a real person, then people begin to understand the responsibility of the role more. AndI think as even more traders get a chance to understand what takes place because a lot of times people are ill advised as it pertains to the different trade ideas. And so as more traders get a chance to see that this is real life versus because trading sometimes can feel like a video game because everything just seems digital.

And so with that, with him kind of just showcasing his personality, speaking up for the rest of the members of theFed, really defining the Fed, what the Fed does, answering those questions that some high schoolers had as well as some of those high school teachers had. I think that was a really good move, especially going into what is going tobe a bearish Friday as far as the consensus numbers, because early in the a. M.

At 830 we do have those core PCE numbers as well as those good trades balance and the consumer sentiment. All Of those coming in tomorrow and all of those are expected to be bearish reportings those coming in lower than the consensus numbers. And so with that we are expecting for the dollar to drop.

So if we’re looking at what it is that we have the dollar can drop a sizable amount. So the dollar can indeed lose this106 area and come back to this 100 and 575 area because even if the dollar dips all the way back down to this area the dollar is still up on the week. So we have to look at everything in perspective.

So the dip that we’re getting on the dollar still has the dollar up for the week. That is super important to keep in mind.Super important to keep in mind that even if we get a dip back down to the minor quarter area below, the dollar is still up for the week.

So everything in perspective. So this would then still make the 11th straight week of the dollar’s run. So even with this pullback, the dollar would still be up for the 11th straight week.

Now, if the dollar were to lose 100 and 575, then that would be a different story as far as what we’re looking for with a potential reversal and been looking towards next week and the news that is coming out for next week. But without that, especially with the way that the stock market bounced today, so with the way that the stock market bounced today, if the stock market is going to end the week in that same way with this news that is coming out, then that would lead to a more bearish outlook on the dollar. The reason being is because that means that the stock market is picking up on signals of a more dovish stance, that whole idea of a soft landing.

So with that being the case, then we would get a stronger dollar pullback, if that is the case, where we would then get the stock market pushing up. So the stock market did push up today in a very nice way, very solid way, especially going into a Friday, but it is a bearish Friday as far as an expected bearish Friday. So we could get a pullback, but then again we have to wait and see.

So again, the number that we’re looking for as far as for the pullback on that news, as far as the bearish news, that is expected if those numbers do indeed come out in the same way that we are. Expecting them to. We are looking for100 and 575 to hold because we had multiple touch points there last week before this week.

Shot up through that same area. And then even after we saw this week shoot up through that area, we then saw this idea come back down to the weekly start and then push back up. So this was really retesting this area, but also making sure that the buyers that started off the week were going to continue this move upward for the dollar.

So that’s what we have for the dollar. As far as the dollar’s outlook we still have for the UCID, that one is up for the week, but it is still below that wild card area. And then we have for the Guida again, that idea is forming a sort of a flag because if more bearish news comes out tomorrow for the dollar, which is the expectation, we can see this move up to that major quarter area of 122 five.

We could see that move potentially. And then we also have for the Euro, we have this idea flagging in very like manner. And so we can see this idea continue to move up to that 106 flat area, that minor dime area, that 106 flat area we have for the Au idea.

So for the Au, again, that same sort of flag area there, we can see this one come back up to his weekly open and we’ll see how it responds to his weekly open. And then for the NU idea, we’ll see how this one responds to the minor quarter that is above it that has been rejecting it the entire week here. And so we’ll see kind of how that responds there.

We also have for the UJ idea we have for this idea, we do have this one up for the week still. And so, again, this one can come down retest this 149 because as you can see, there is a solid block here of buyers that were here at this149 area down to 148 75. So we can get this one to pull back and still be bullish at 148 75 if that news does indeed come in bearish.

But we have to wait and see how that news does indeed come in.

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