Forex Trading Library

Intraday Market Analysis – GBP under pressure

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EURGBP tests resistance

The pound tumbled after the BoE expressed concerns of a prolonged recession. On the daily chart, the near 3-month long consolidation might have come to an end after a bullish candle above 0.8650. The surge is likely to be caused by short-covering from traders on the wrong side. The price has hit resistance at 0.8770 which lies in the supply zone extending to last month’s peak at 0.8830. A bullish breakout would resume the rally in the medium-term. In the meantime, 0.8620 is a key support to keep the bounce intact.

XAGUSD struggles for support

Silver falls back as the dollar extends sharp gains across the board. A bearish RSI divergence showed a slowdown in the rally. After a double top at the psychological level of 24.00, the first wave of profit-taking took the price below 23.20, putting the bulls on the defensive. The next round number 22.00 coincides with the base of a previous breakout and the 30-day moving average, making it an area of particular interest. Its breach could trigger a deeper correction to 21.00. 23.50 has become a fresh hurdle.

GER 40 in liquidation mode

The Dax 40 slumps over risk-off sentiment into the holiday season. The rally came to a halt near last June’s high of 14700. Then a break under the lower end (14150) of the previous consolidation forced leveraged positions to close out, sparking volatility in the process. The psychological level of 14000 has failed to contain the sell-off and turned into a fresh resistance. 13600 is the next support. As the RSI sunk into oversold territory, those looking to buy the dip may want to wait for the liquidation to settle down.

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