Intraday Market Analysis – USD Needs Further Support.
USDCHF rebounds from daily support
The US dollar popped up after April’s core personal consumption expenditure rose by 3.1%.
The pair has bounced off 0.8930, a key support on the daily chart. Momentum above the psychological level of 0.9000 is a sign of strong conviction from the buy-side. A break above 0.9045 may reverse the bearish sentiment and open the door to the daily resistance at 0.9090.
As the RSI has overshot above 80, buyers might show caution in chasing after green candles. 0.8970 would be the first support in case of a pullback.
EURGBP struggles to find support
Sterling climbed after the BoE commented it may look at discussing rate hikes if the economy continues to improve.
The euro has given up all recent gains after the pair broke below 0.8620. This is a reminder that the pair is still in a wide consolidation range between the base of the rebound (0.8480) and the key daily resistance (0.8720).
The RSI is rising back from the oversold territory. 0.8560 may turn out to be temporary support if sentiment deteriorates. A pullback is likely to meet stiff selling pressure near 0.8640.
CADJPY surges towards a 3-year high
The Japanese yen is still licking its wounds after both CPI and the unemployment rate fell short of expectations.
The loonie has been trading in the 89.60-90.70 range to consolidate its gains. Last week’s pop caught the short side by surprise.
Stop-losses and momentum buying exacerbated the rally. This confirmed that buyers are still in control of the price action despite recent attempts to break lower.
There is a chance of a brief retracement towards 90.30 to cool off the RSI. January 2018’s high at 91.50 would be the next target.