Forex Trading Library

Intraday Market Analysis – EUR gains support

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EURUSD attempts to bounce

The euro recovers as record high inflation in September cements expectations for another large ECB rate hike. An oversold RSI on the daily chart attracted some buying interest, but this could turn out to be a mean reversion trade rather than a sustained recovery. 0.9890 on the 20-day moving average is a resistance and trend followers could be expected to jump in to fade the bounce. In case of a bullish breakout, the single currency may flirt again with parity. Otherwise, 0.9680 is a fresh support should the pair start to drift lower.

GBPUSD tests resistance

The pound bounced back thanks to emergency BoE bond buying. The price is now at a crossroads after it recouped all the losses from the previous liquidation. Selling pressure could be expected around 1.1250 over the 20-day moving average as sentiment remains downbeat in the medium-term. However, its breach could give Sterling some breathing room and turn things around in the coming days. As the RSI returns to the neutral area, the demand zone between 1.0700 and 1.0900 is key in assessing buyers’ commitment.

GER 40 lacks support

The Dax 40 slides over the prospect of a 75 basis point hike from the ECB. A combination of a break below the critical support at 12450 and a bearish MA cross on the daily chart indicates that sentiment has shifted back to the downside, making the bear market official. Sellers may see any rebound as an opportunity to stake in. The demand-turned-supply area around 12500 could keep the buying in check. 11800 might be a temporary support and its breach would trigger a new round of sell-off to October 2020’s low at 11400.

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