Intraday Market Analysis – AUD Shows Overextension.
AUDUSD seeks support
The Australian dollar turned south after the RBA signaled an extension of its QE program.
The pair’s rapid rise above the daily resistance (0.7400) has pushed sellers to the exit. However, the RSI’s repeated tops in the overbought zone have taken a toll on the momentum. A steady pullback is necessary to let the bulls consolidate their gains.
The former supply zone around 0.7360 has turned into support. An oversold RSI may attract buying interest. 0.7500 would be the next target in case of a rebound.
USDJPY tests resistance
The Japanese yen inched higher after an upbeat GDP in Q2. The pair is trading in a narrowing range, a sign of the market’s indecision before a major breakout.
From the daily chart’s perspective, the bullish bias still prevails.
Buyers have bid up from 109.10 and 109.55 is the latest support. A rally above the psychological level of 110.00 is pushing to the key resistance at 110.50.
A bullish breakout would cement the optimism. A fall below said support would shake out short-term buyers and send the pair to revisit 109.10.
EURGBP aims at July’s high
The single currency surges as the eurozone’s Q2 growth beats expectations.
After a short-lived consolidation, the break above 0.8610 has put the rally back on track. Strong momentum is an indication that sellers have rushed to cover their positions.
The coast is now clear to July’s high at 0.8660. However, the initial impulse has run into exhaustion as the RSI showed an overbought situation.
A limited retracement would let the bulls catch their breath. A rebound from 0.8575 would attract momentum traders.
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