Intraday Market Analysis – Risk Currencies Rally.
AUDUSD falls back for support
The Australian dollar pulls back as risk assets tread water amid low liquidity. A break above the previous high at 0.7220 reveals a strong bullish bias.
However, the RSI’s repeatedly overbought situation may have prompted short-term buyers to take some chips off the table. In turn, this left price action vulnerable to retracement.
0.7200 is the closest support. Its breach would trigger a deeper correction towards 0.7120. A close above 0.7250 may resume the reversal and carry the Aussie to the daily resistance at 0.7360.
USDCHF tests consolidation range
The US dollar softens over weaker Treasury yields.
The pair’s latest rebound has met aggressive selling at the upper bound of the consolidation range near 0.9250. That is a sign of lingering bearish pressure. The greenback is testing the lower bound near 0.9160. Range traders were eager to buy the dip as the RSI ventured into the oversold zone.
0.9210 is an intermediate hurdle leading to the upper limit where a breakout could trigger a bullish reversal towards 0.9350. Otherwise, a drop below 0.9160 may send the pair to 0.9100.
EURJPY breaks higher
The Japanese yen weakened after Japan’s jobless rate rose to 2.8% in November. The long side has gained the upper hand after they pushed above 129.60.
A bullish MA cross following a brief consolidation indicates an acceleration in the upward momentum. A break above the psychological level of 130.00 would set 130.60 as the next target, clearing the path for a rally to 131.30.
An overbought RSI may cause a temporary pullback. 129.20 from the previous supply zone has become a fresh support.
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