Intraday Market Analysis – GBP Attempts to Bounce Back

GBPUSD grinds key resistance

Sterling rallies as a small-than-expected fall in the UK’s retail sales alleviates recession fears. A bullish RSI divergence showed a deceleration in the latest sell-off. Then a rally above 1.2400 provides confirmation that the selling interest could be waning. 1.2640 is the closest resistance from the daily chart and it coincides with the 30-day moving average. Volume could be expected as the pound changes hands in this congestion area. A breakout could propel the pair to 1.2800. 1.2340 is the first support in case of a retreat.

EURCHF tests important support

The Swiss franc consolidates gains following the SNB’s hawkish signal. A sharp fall below the demand zone (1.0350-1.0370) took buyers by surprise and forced leveraged positions to liquidate in a rush. The RSI’s oversold situation prompted intraday sellers to cover. Buyers need to lift offers around 1.0390 before they could draw attention. 1.0200 at the base of the May bounce is a critical floor. A deeper correction would send the euro to 1.0100, a step closer to a bearish continuation in the medium-term.

GER 40 tests key resistance

The Dax 40 goes sideways as global equity markets remain under water. The index found support at the origin of a previous breakout at 13700. The RSI’s double dip in the oversold area triggered a ‘buy-the-dip’ behaviour. The bulls need to clear the supply zone around 14250 to reclaim control of the price action. A bullish breakout could ease the selling pressure and pave the way for a steady recovery towards 14900. As the RSI swings back from overbought territory, 13700 is a key support to keep the bounce valid.

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