Intraday Market Analysis – Euro Searches For Support.
EURUSD retreats from resistance
The euro slowed its advance after April’s CPI dropped to 0.7% YoY.
The pair has met selling pressure at February’s peak at 1.2240. An overbought RSI is likely to prompt short-term players to take profit, pushing the price into a deeper correction.
The divergence is a sign of loss of momentum in the bid war. The previous supply zone near 1.2150 has turned into a support where buyers may wait for a bargain.
On the upside, a bullish breakout could trigger an extended rally above 1.2300.
USDCAD rebounds to resistance
The US dollar climbed back after the Fed minutes left the door open for discussing tapering. The pair had previously dipped below September 2017’s low at 1.2060, increasing the downward pressure.
The rebound may turn out to be elusive just to let the RSI recover into the neutral area. The price action faces multiple layers of resistance.
After clearing the closest one at 1.2135 early bulls will need to lift 1.2200 to force sellers to start to fold.
On the downside, a return to 1.2010 may send the exchange rate towards 1.1920.
UK 100 consolidates above major support
FTSE 100 remains under pressure after the UK’s inflation doubled to 1.5% last month. The surge from the demand area near 6840 indicates buyers’ commitment to keep the boat afloat.
Recent whipsaws are a strong sign of the market’s indecision in the short term. Sideways action may offer opportunities for range trading.
The psychological level of 6900 is a demand area. An oversold RSI could help lift the index temporarily.
7066 is the immediate resistance and its breach could send the price back to 7166.