Intraday Market Analysis – GBP Attempts Rebound.
GBPUSD tests critical support
The pound drifted lower after Britain’s retail sales figures fell in July. The pair has given up all its gains from late July and is testing the critical support at 1.3600 from the daily chart.
A diverging RSI suggests a slowdown in the downward impetus. Its oversold situation may have attracted buying interest in the demand zone. 1.3770 would be the first target in case of a rebound.
Otherwise, a bearish breakout would trigger a new round of sell-off towards 1.3460 as those who bought the dip reverse gears.
USDCAD clears previous peak
The Canadian dollar tanked after last month’s retail sales failed to impress. The greenback saw increased momentum after it rallied above July’s peak at 1.2800.
The breakout can be a confirmation of a bullish reversal for the weeks to come. A pullback is necessary to let the bulls catch their breath.
An overbought RSI has swung towards the oversold territory. 1.2750 near the previous high is now the immediate support. A rebound would challenge the psychological level of 1.3000.
GER 30 breaks bullish trendline
The Dax 30 retreats as investors grow wary of the recovery’s momentum.
The index had only briefly held onto the 16000 milestone. The break below the rising trendline has put a halt to a month-long rally.
The current consolidation is a sign of indecision after a round of liquidation. An oversold RSI has prompted traders to buy the dip near 15600.
The rally may only resume if the bulls succeed in lifting offers around 15970. Failing that, price action could be vulnerable below 15600.
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