AUDUSD rallies from key demand zone
The Australian dollar claws back losses against a weaker dollar after a mixed bag of US jobs data. The pair saw a strong rebound off the demand zone (0.7650) from the daily chart.
The initial surge above 0.7740 is a sign of commitment from the buy-side. As the short side rushes to cover their positions, we can expect more momentum.
The zone around 0.7730 has turned into a support. After the RSI drops from its overbought condition, a break above 0.7770 could trigger a runaway rally towards 0.7850.
USDJPY tests rising trendline
The Japanese yen advanced after a slower-than-expected GDP contraction in Q1.
The US dollar has come under pressure in the supply zone near 110.30, the origin of April’s sell-off.
The RSI’s repeated rise into the overbought area is an indication of exhaustion in the upward momentum. The pair is now testing the trendline from April which coincides with the psychological level of 109.00.
As the RSI recovers into the neutral area, we could expect strong buying interest. 109.80 is an intermediate resistance on the way up.
UK 100 holds firm after breakout
The FTSE 100 consolidates its gains as investors await confirmation of the June 21 reopening.
Price action has found support at 7010 after it broke above the flag consolidation. This is a sign of a bullish continuation now that the sellers could be out of action.
7115 is the immediate resistance and its clearance would lead to the previous peak at 7165. A bullish close above this critical level would lift the index to 7200.
On the downside, a drop below 7040 may extend the consolidation towards the psychological level of 7000.
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