USD Re-Tests a Familiar Area of SupportU.S. Dollar Currency IndexTVC:DXYFOREXcomBack in April the US Dollar was dropping like a rock. While the sell-off in stocks had stalled by the time we got to Easter, the bearish trend in USD was in full-force, going along with a strong breakout in Gold and many major FX pairs. But it was the low on Easter Monday that finally stalled matters for a bit. That price came in right around the 98.00 level, and led to four weeks of strength, including through the May FOMC rate decision, all the way until the 102-handle came into play. That's where the music stopped for the USD rally in Q2, and sellers went back for another push down to fresh lows that ultimately showed with a fresh three-year-low on day one of Q3. Since then, however, bears have been stalled and there's a couple of different supporting backdrops there, such as the oversold readings that had shown on both the daily and the weekly as we came into Q3, or the falling wedge formation that had built as sellers remained really aggressive at highs or tests of resistance while less so around lows or tests of support. And it's not like July was all that bullish of a month for the USD as we heard Trump continue to press his desire for low rates, including threats to fire FOMC Chair Jerome Powell. And at this stage, markets are pricing in a rate cut in September, along with another by the end of the year and possibly two. So expectations on rates are really low yet, on a relative basis, the USD has held up somewhat well. At this point we're at another major test with the USD re-testing that same spot of support that had come into play in April, around the 98.00 handle in DXY. There's more context for support in the USD down to around 97.60, which helps to create a zone. For USD-weakness, I still think GBP/USD remains as attractive, but for USD-strength, EUR/USD could be an interesting case given the Fibonacci resistance that's started to show there. - js