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Intraday Market Analysis – USD Consolidates

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USDJPY seeks support

The US dollar fell back after May’s PCE came out short of expectations. After a brief pullback, the pair found solid support next to the former resistance at 134.30. A pop above the recent high (136.70) suggests that the bulls are back in the game. This is a bullish sign that the overall direction remains up. Though short-term price action may be choppy as the greenback looks for bids below 135.80. 135.10 is the next support to gauge buying interest. The bulls will need to push above 136.40 to continue upward.

GBPUSD tests critical support

The pound treads water as Britain’s Q1 GDP was in line with expectations. The pair’s struggle to hold above the demand zone near 1.2180 reveals weakness in the latest recovery. The lack of follow-up rally drove the bulls to exit, exacerbating the bearish pressure. The RSI’s oversold condition caused a limited bounce which could be capped by offers around 1.2200. The origin of the mid-June surge at 1.2070 is buyers’ last stronghold and a bearish breakout would trigger a wave of liquidation below the daily support at 1.1900.

USDCAD bounces higher

The Canadian dollar struggles over a slowdown in April’s GDP growth. Sentiment remains in the US dollar’s favour after a tentative break above May’s high at 1.3070. A bullish MA cross on the daily chart indicates an acceleration to the upside as the pair bounces back. A close above 1.2910 led short-term sellers to cover their positions. 1.2980 from a previous sell-off is a key hurdle and its breach may take out the remaining selling interest and pave the way for an extended rally. On the downside, 1.2820 is a major support.

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