Intraday Market Analysis: USD still in correction.
USDJPY struggles to rebound
The US dollar edged lower after the inflation reading in November met expectations. The pair has found support at 112.55 while the RSI dipped into the oversold area.
Though bulls are struggling to push past 113.95, a bullish breakout would prompt sellers to jump ship, rising volatility in the process.
The previous peak at 115.50 would be the next target. The former supply zone around 113.25 has turned into a demand zone. Further weakness could send the dollar to revisit the said support.
XAGUSD to test major support
Silver bounced higher over a weaker US dollar. A bearish MA cross on the daily chart suggests that sellers are still in control of the direction.
Following a brief consolidation, a drop below the psychological level of 22.00 is another confirmation of the downtrend. The metal is heading towards September’s lows around 21.50. This is a major floor to keep the price afloat and its breach could trigger a bearish reversal below 20.00.
On the upside, buyers need to lift 22.45 before they could hope for a turnaround.
UK 100 to test previous high
The FTSE 100 hit a speed bump after a flat UK GDP reading in October. The psychological level of 7000 near October’s lows has offered strong support.
Sentiment turned around after a bullish close above the daily resistance at 7310. The RSI shot into the overbought area, causing a temporary pullback.
Buying interest could be expected around 7250 as sellers switch sides. A rebound may test the previous peak at 7400 and then resume the rally.
On the downside, 7110 would be the second line of defense.
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