Forex Trading Library

Intraday Market Analysis – S&P 500 struggles for support

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EURUSD takes a breather

Traders took profit in the euro after the ECB raised its interest rates by 75 basis points as expected. A rally back to parity indicates strong interest in defending the historical exchange level. The price hit resistance at 1.0090 near September’s high (1.0200) and the current drawdown would allow the bulls to take a breather. 0.9940 from a previous breakout is the closest area to expect renewed buying as the RSI swung into the oversold area. A bullish breakout could lead to an extended recovery in the days to come.

USDJPY seeks support

The Japanese yen weakens as the BoJ maintains its ultra low rates. The RSI’s double top in the overbought area on the daily chart was a strong sign of overextension. A sharp fall below 150.00 has triggered a wave of liquidation. Now that short-term leveraged buyers are out of the picture, the pair is looking for an area of accumulation as medium-term sentiment remains bullish. 145.00 near the consolidation back in early October is a key support. 147.30 is the first resistance and its breach could help the greenback recover.

US 500 hits resistance

The S&P 500 softened as the US GDP beat expectations in Q3. A close above October’s high at 3800 prompted sellers to cover, easing the pressure on the index. The support-turned-resistance at 3900 is a major hurdle and its breach could trigger a bounce back to 4100. However, the RSI’s repeatedly overbought condition caused a pullback as buyers started to take some chips off the table. 3730 is a key area to expect follow-up interests. Otherwise, the index could be vulnerable to a correction towards 3640.

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