USDJPY resumes rally
The US dollar popped higher as investors positioned themselves ahead of fresh inflation data. The pair found strong support in the demand zone around 134.80 after a week-long consolidation. A close above the previous high at 137.00 is a signal for bullish continuation. 138.50 would be the next target. The RSI’s overbought condition could briefly temper the upward drive. The bulls may look to buy dips as sentiment is still overwhelmingly upbeat. 136.00 at the base of the latest breakout is a major support.
EURGBP struggles for bids
The euro weakens as the euro zone bond yields fall amid lower inflation expectations. A break below the daily support at 0.8490 may have put the pair on a bearish reversal course. Close-out of leveraged positions exacerbated volatility. An oversold RSI prompted sellers to take profit, though the bounce could be limited as buyers might be wary of catching a falling knife. The demand zone above 0.8400 is important as its breach would send the pair below 0.8370. 0.8490 is the level to clear before the pair could turn around.
SPX 500 hits resistance
The S&P 500 consolidates as investors get ready for Q2 earnings. The index is looking to stabilize after it inched further into bearish territory. The current bounce came under pressure in the supply zone around 3950 which coincides with the 30-day moving average. This area of congestion is a pivotal point for the next move. A bullish breakout could remove short-term selling interest and trigger an extended rally towards 4060. Otherwise, a fall below 3815 would send the index to 3750, a critical floor to keep the rebound intact.
