- EURUSD bearish below 1.3475 but likely stuck pre-ECB.
- USDJPY holds former resistance, AUDUSD struggles at support.
- August forex seasonality in QE era supports a stronger US Dollar.
The Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) retains its bullish stance despite the weak selloff seen after the July Nonfarm Payrolls report. The US labor market data, while strong and steady with the sixth consecutive month of jobs growth north of +200K, was likely 'baked into' price across the USD-spectrum.
Indeed, now that the USDOLLAR has broken the downtrend governing price since January, we're sent looking for opportunities in which the greenback may strengthen over the coming days and weeks.
The two best opportunities over the next few days may not be in the European currency realm, however. The ECB meeting on Thursday likely handicaps any moves by the Euro (in either direction), and the August seasonality forecast is rather benign.
Instead, as explained in the video above, we turn our attention to AUDUSD and USDJPY, two of the more actionable USD-based setups active in the market right now. As the 5-year seasonality forecast shows, August tends to be a positive month for the US Dollar amidst a stretch of general weakness; the US Dollar's strength at the end of July versus the Aussie and the Yen may be a precursor to a better August than history suggests for the greenback.
Read more: Euro Rebound Likely Temporary as ECB Convenes on Thursday