Intraday Market Analysis – USD Overextends.
USDCHF pulls back
The US dollar stalled after higher-than-expected initial jobless claims last week.
A bullish MA cross on the daily chart indicates an acceleration in the upward momentum after a three-month-long consolidation. A close above September’s peak at 0.9325 would give the bulls confidence to stake in. 0.9410 would be the next target.
In the meantime, the RSI’s double top in the overbought area and its bearish divergence may cause a retracement. 0.9300 from the latest breakout would be the first support in that case.
USDJPY hits major resistance
The Japanese yen bounced back after a fall in August’s unemployment rate.
Sentiment still favors the US dollar after it broke above July’s high at 111.60. The pair has reached the pre-pandemic supply zone near 112.20.
A repeatedly overbought RSI has tempered the bullish fever. Buying into pullbacks would be a better option to avoid being caught in overextension.
Below the trendline, 111.20 is the first line of defense. Further down, 110.50 would be another key support to expect buying interest.
XAGUSD sees limited rebound
Silver remains under pressure from rising US bonds yields. The precious metal has sunk to a twelve-month low for lack of support.
The break below the psychological level of 22.00, the lower band of a year-long consolidation, has prompted buyers to abandon ship. This would confirm the bearish bias in the medium term.
The RSI’s oversold situation is driving some profit-taking. Though the rebound is likely to meet stiff selling pressure near 22.35. A new round of sell-off would send the price to 21.00.
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