Intraday Market Analysis – USD Keeps Bullish Bias.
EURUSD breaks critical support
The US dollar rose after the Fed minutes suggested tapering later this year.
The euro’s previous rebound had met stiff selling pressure at 1.1800. The slide below 1.1710 (a critical support from last March) is an indication that sellers still have control of the direction.
A temporary bounce while the RSI recovers to the neutrality area can be an opportunity to sell into strength.
The former support at 1.1740 has turned into a supply zone. Below 1.1700 renewed momentum may drive the pair to October’s low at 1.1600.
GBPUSD sees limited rebound
The sterling remains under pressure after the UK’s lower-than-expected core CPI in July. The break below the intermediate support at 1.3800 has accelerated the downward impetus.
An oversold RSI has helped lift the price but this could be a dead cat bounce with sellers eager to double down at a better fill.
1.3780 is a fresh resistance and likely to check the pound’s advance. 1.3700 is the closest support which coincides with the 61.8% Fibonacci retracement of the July rally.
Further down, 1.3600 is a demand zone on the daily chart.
USDCAD resumes rally
Upbeat BOC CPI failed to outweigh the US Fed’s hawkish July minutes. The US dollar’s rally has gained traction after it cleared the supply area at 1.2600.
A combination of short-covering and fresh buying suggests that the uptrend may have resumed after a month-long consolidation. An overbought RSI may cause a limited pullback.
The resistance-turned-support at 1.2580 would see buying interest in that case. On the upside, a break above 1.2700 could open the door to the peak at 1.2800.
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