USDJPY struggles for bids
The US dollar consolidates as traders reassess future rate hike moves by the Fed. A bearish RSI divergence and MA cross on the daily chart suggest the start of a correction. A short-lived rebound came to a halt in the supply zone around 135.40 which coincides with the 20-day moving average. A follow-up break below 133.00 indicates that the path of least resistance could be down. 130.50 at the origin of a bullish breakout in June is a critical floor, its breach may extend losses to last May’s lows next to 126.90.
EURGBP tests resistance
Sterling treads water as the market expects a contraction in the UK’s Q2 GDP. The latest rebound came under pressure near the support-turned-resistance at 0.8470 which sits on the 30-day moving average. A bounce off 0.8410 showed solid interest in keeping the single currency afloat. A close above 0.8470 would send the pair to 0.8520 where a breakout could prompt more sellers to cover their bets, laying the groundwork for a rally to June’ highs next to 0.8580. 0.8410 is the first support in case of hesitation.
SPX 500 pulls lower
The S&P 500 falls back over concerns that inflation is yet to peak. Divergence between the 20 and 30-day moving averages indicates an acceleration to the upside. The current recovery may have gained traction after a break above June’s peak at 4200. Along with medium-term bears rushing to avoid a squeeze, momentum buying may continue to support the index. May’s high at 4300 would be the next target. An overbought RSI may cause a limited pullback, If this occurs, 4150 is a new support level.