EURGBP consolidates gains
The pound steadies as traders reposition ahead of the BoE interest rate decision today. The pair is inching up along a trend line from its mid-April trough. The latest pullback has found bids in a former supply zone around 0.8370. This is a sign of solid interest in keeping the recovery well-supported. 0.8460 from the end of March sell-off is an important resistance. Its breach would lift offers to the March peak at 0.8510 where a breakout could trigger a bullish reversal in the weeks to come.
USOIL awaits breakout
WTI crude rallies as the EU proposes a phased oil embargo on Russia. The recent retracement met strong buying pressure at the psychological level of 100.00. A bullish bias prevails as the market exhibits a series of higher lows. This suggests that the bulls are willing to bid up despite a choppy price action. A bullish close above 109.00 could trigger a rally towards 116.00, breaking out of a two-month long flag consolidation as a sign of trend continuation. The RSI’s overbought situation may cause a limited fallback.
SPX 500 breaks resistance
The S&P 500 recoups losses as the Fed rules out a 75 bp rate hike in the future. Nevertheless, a bearish MA cross on the daily chart suggests an acceleration to the downside, further advancing the case for a bearish market in the medium-term. The index is bouncing off a 12-month low at 4070, mostly driven by the short side’s profit-taking in this demand zone. Bids have been scarce for fear of a dead cat bounce but a break above 4300 could instil a bit of confidence. 4400 is the next target and 4160 now a fresh support.