Forex Trading Library

Intraday Market Analysis – USD attempts to bounce

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GBPUSD consolidates

The pound steadies as wage growth argues in favour of further BoE tightening. The price action has been struggling to clear the daily resistance near 1.2300. Two consecutive failed rebounds show a lack of buying power. Sterling is resting over the psychological level of 1.2000 thanks to bargain hunting. Its breach would force the bulls out, leaving it vulnerable to momentum selling towards July’s lows around 1.1800, which is a major floor to safeguard the month-long recovery. 1.2150 is the first resistance the buy side needs to lift.

USDCAD seeks support

The Canadian dollar holds well against its US counterpart as July’s CPI remains stubbornly high. A bullish RSI divergence showed a deceleration in the sell-off. The greenback’s bounce above 1.2900 led sellers to close their positions. The initial momentum has dried up to let the RSI recover into the neutrality area. 1.2820 around the start of the bullish breakout is a demand zone to see whether there is enough follow up interest in pushing the US dollar higher. A close above 1.2950 could open the door to the recent peak at 1.3170.

US 30 stays up

The Dow Jones 30 continues upward supported by upbeat outlooks from blue chip retail stocks. Confidence has shot up after a rise above the daily resistance at 33000 and then May’s high at 34000, setting 34500 at the origin of the liquidation in April as the target. A break above that supply zone would intensify the short squeeze. The RSI’s overbought situation on the daily chart may weigh on the enthusiasm. A retreat below 33850 could trigger a wave of profit-taking, and 33400 would test short-term buyers’ resolve.

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