Intraday Market Analysis – USD to Test Key Resistance.
USDCHF approaches key hurdle
The US dollar continues to make up lost ground thanks to post-NFP momentum.
The break above 0.9150, the last leg of the previous sell-off, suggests solid commitment from the bulls. The rebound has originated from the demand zone around 0.9030 on the daily chart, and it is heading towards the major resistance at 0.9230.
A bullish breakout may help the dollar break free of a narrowing consolidation range and resume the rally from the start of the year.
0.9140 is the first support in case of a pullback to let the RSI cool down.
EURGBP tumbles through floor
The sterling rises as traders bet that the BOE would start to tighten its policy sooner than most of its peers.
The daily support at 0.8470 has failed to contain the firesale. The bearish breakout has invalidated April’s rebound as sellers became more aggressive.
The downward momentum is pushing the price towards 0.8400.
An oversold RSI may have caused a limited bounce as intraday traders take some chips off the table. Sentiment remains downbeat though, as long as the euro is under 0.8520.
GER 30 struggles to break higher
The Dax 30 hits a speed bump as investors fret about tapering in the wake of strong US jobs data. The rebound has come to a halt right at the peak at 15800.
Buyers’ struggle to push past the all-time high indicates stiff pressure from both profit-taking and fresh selling.
The RSI divergence in this kind of major supply area is a warning sign as buying has lost its impetus.
The break below 15660 could prompt the bulls to bail out. 15440 would be the next support as the index goes into a correction.
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