Intraday Market Analysis – EUR Sees Deeper Correction.
EURUSD confirms bearish divergence
The US dollar further recovers after the ADP showed nearly a million jobs added last month.
A bearish RSI divergence in the supply area (1.2255) was a forward warning that the previous rally was losing steam.
The fall below 1.2185 suggests that the bulls may start to unwind their positions. A brief rebound around 1.2200 saw strong selling interest. Sentiment has turned bearish and the drop below 1.2130 could trigger a broader sell-off towards 1.2070, the first support found on the daily chart.
AUDJPY sold from major resistance
The Australian dollar slipped after muted retail sales in April. The pair has met stiff selling pressure near 85.15. Four failed attempts to clear this resistance level suggest exhaustion from the buy-side.
The break below 84.75 could be the straw that broke the camel’s back as buyers start to bail out. The sell-off could gain momentum once it goes below 84.55. Then 84.25 is the next support.
An oversold RSI may lead to a temporary pullback, which could turn out to be a dead cat bounce.
NAS 100 falls from daily resistance
Equity markets dip on upbeat jobs numbers as the inflation scare resurfaces.
The Nasdaq 100 has been struggling near 13800, a major resistance level on the daily chart. The first dip below 13620 has prompted cautious buyers to get out near 13710 while they still could.
13400 is the base of the latest rally and a key support in the short term. Its breach could send the index to 13160. An oversold RSI may temporarily alleviate the selling pressure as new sellers await a rebound before joining in.
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