Intraday Market Analysis – USD Rally On Hold.
USDJPY sees limited correction
A drop in July’s core CPI in the US has put the greenback on the defense.
The rebound had gained traction after the pair closed above 110.50, a major resistance on the daily chart. This is a strong sign that the rally may have resumed after a five-week-long consolidation.
Though a repeatedly overbought RSI showed overextension in the short-term, and the current pullback would test the psychological level of 110.00.
Then 111.20 would be the next stop if the bullish momentum picks up again.
AUDUSD tests key resistance
The Australian dollar hit resistance after worse-than-expected consumer inflation expectations.
The pair is still under pressure after it met stiff selling pressure at the 20-day moving average (0.7400).
The drop below the key support at 0.7330 may have threatened the chance of a sustainable rebound. Only a bullish close above 0.7400 would bring back confidence to the bulls.
Otherwise, past 0.7320 the bears would challenge the floor at 0.7290. A breakout could trigger an extended sell-off as those who bought the dip switch side.
US OIL attempts rebound
WTI crude recouped losses after the US inventory showed a deficit last week.
Strong buying interest on the daily support line at 65.30 has initiated a rebound. However, a bearish MA cross on the daily chart may have tempered the bullish mood.
The bulls will need to lift the psychological level of 70.00 as a show of strength. Then they may have a chance to grind past 74 and preserve the rally.
Failing that, a break below the said support may trigger a bearish reversal towards last May’s low at 61.50.
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