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Forex pairs in this Article » EUR/USD, GBP/USD, USD/JPY
- US Dollar at risk of further declines as S&P 500 surges

- Forex volatility prices have tumbled, putting pressure on USD

- Our trading biases favor selling into Dollar bounces

The US Dollar is at risk of further declines as a surge in the S&P 500 leaves the safe-haven currency out of favor. Which trades are we watching?

Nine-consecutive daily declines leave the Dow Jones FXCM Dollar Index at potentially critical support, but clearly one-sided price action likewise suggests that the trend is now definitively lower. Thus we remain focused on several key technical levels and potential trade setups.

Dow Jones FXCM Dollar Index Falls 9 Consecutive Days

forex_trading_strategy_selling_into_US_Dollar_weakness_body_Picture_1.png, US Dollar Likely to Fall Further - What Trades are we Watching?Chart prepared by Jamie Saettele, CMT using Marketscope 2.0 – is here.

Our Senior Strategist highlights the fact that the EURUSD is at critical resistance and the USDJPY is at a similarly important price floor. A major US Dollar breakdown seems unlikely given a sharp drop in volatility prices (see chart below). Yet we can’t rule it out, and indeed we generally favor using our proprietary Momentum2 trading strategy for US Dollar-short opportunities.

We’ll keep a close eye on the US Dollar against the Euro, Japanese Yen, and other counterparts for trading opportunities. Take a look at full strategy preferences below and sign up for future e-mail updates via my distribution list.

Forex Volatility Prices Continue Lower, Favoring slow Price Action and USD Weakness

forex_trading_strategy_selling_into_US_Dollar_weakness_body_Picture_2.png, US Dollar Likely to Fall Further - What Trades are we Watching?Source: OTC FX Options Prices from Bloomberg; DailyFX Calculations

DailyFX Individual Currency Pair Conditions and Trading Strategy Bias

forex_trading_strategy_selling_into_US_Dollar_weakness_body_Picture_3.png, US Dollar Likely to Fall Further - What Trades are we Watching?forex_trading_strategy_selling_into_US_Dollar_weakness_body_Picture_4.png, US Dollar Likely to Fall Further - What Trades are we Watching?Automate our SSI-based trading strategies via Mirror Trader free of charge

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