Intraday Market Analysis – USD Struggles To Hold Gains.
USDCHF drops after bearish cross
The US dollar came under renewed pressure after retail sales showed a flatline in April. The latest rebound has struggled to clear 0.9090.
An overbought RSI at this key resistance was a warning of exhaustion. Then a fall below 0.9030 was a confirmation of the bearish MA cross. This is a strong signal that the price action has reversed its course to the downside.
A breakout below 0.8985 could trigger a new round of sell-off towards 0.8930. 0.9050 is the closest resistance if the price goes sideways.
AUDJPY bounces from support
The risk-sensitive Australian dollar rebounds as risk appetite returns. The pair has bounced off the 20-day moving average on the daily chart which coincides with the short-term support at 84.25.
General sentiment remains upbeat as the Aussie carries on the fourteen-month-long rally. Strong momentum above 84.85 points to 85.80 as the next target.
The bullish MA cross is another indication of recovery. As the RSI shows an overbought situation a temporary pullback towards 84.55 is possible.
UK100 recovers above psychological level
FTSE 100 bounces back as inflation fears take a back seat. The index saw strong buying interest at 6840, a demand zone on the daily chart.
The rally above 6980, the origin of the latest sell-off then the psychological level of 7000 is an indication that buyers have strong conviction to push back.
The crash seemed to be an opportunity to buy the dip once again. A close above 7045 would prompt more buyers to join and send the price towards the peak at 7165.
On the downside, 6940 is the immediate support.