Intraday Market Analysis – EUR Rally Accelerates
EURUSD breaks higher
The euro soared as traders bet that persistent inflation could force the ECB to act sooner than later.
A break below the daily support at 1.1300 had put the single currency under pressure. However, a swift rebound above this support-turned-resistance indicates strong commitment from the buy-side.
The pair is rising towards the January peak at 1.1480. The RSI’s triple top in the overbought area may slow the momentum down as intraday buyers take a break. 1.1270 is a key support to keep the rebound relevant.
GBPUSD tests resistance
The pound popped higher after the BOE raised interest rates to 0.5%.
The latest rebound above the resistance at 1.3520 has prompted sellers to cover. Then the rally is accelerating towards 1.3660 which is a major hurdle from the sell-off in late January.
A bullish breakout could turn sentiment in the sterling’s favor and send the price to the previous peak at 1.3740. On the downside, 1.3500 is an important support and its breach could invalidate the recovery despite the bullish catalyst.
CADJPY awaits breakout
The Canadian dollar recovers over growing risk appetite. A fall below the demand zone around 90.60 weighed on sentiment as the loonie struggled to make a higher high.
The pair found support at 89.70 in what used to be a former supply area on the daily chart. The current consolidation is a sign of indecision. 91.10 proves to be a tough resistance to crack.
A bullish breakout could bring the price to the recent peak at 92.00. Failing that, the pair may suffer from another round of sell-off below 89.10.