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Intraday Market Analysis – USD continues downward

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EURUSD rallies along trend line

The euro steadies ahead of the ECB interest decision today. On the daily chart, the pair is heading to last May’s high of 1.0800 after bouncing off 1.0300 on the 20-day moving average. Zooming into the hourly time frame, the euro has been climbing along a rising trend line, with a fresh support at the base (1.0530) of the latest momentum. The bullish mood may continue to carry the price action, but selling pressure could grow as the pair approaches the supply zone where short-term buyers might start to take profit.

GBPUSD to test resistance

The pound holds firm as the BoE meets amid softer CPI from last month. Sterling is grinding its way up along a rising trend line and past last summer’s high of 1.2250 which has turned into a support. A break above 1.2340 indicates that the bulls are still in control. A pullback could be absorbed by eager trend followers. The psychological level of 1.2500 is the next step and its breach would open the door to last May’s high around 1.2660. On the downside, 1.2110 is the bulls’ second layer of defence in case of a correction.

AUDUSD tests major resistance

The US dollar softened after the Fed raised interest rates by 50 basis points as expected. The bulls have been probing resistance under September’s high of 0.6900 for a couple of weeks. Profit-taking was not enough to trigger a broader sell-off, which suggests that sentiment has stayed rather upbeat. The latest surge shows strong commitment from the long side and a bullish breakout could extend gains above the psychological level of 0.7000. The demand zone around 0.6780 is key in keeping the momentum in play.

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