Intraday Market Analysis – GBP bounces back
GBPUSD seeks support
The high beta pound edges higher on improved market sentiment. A surge above 1.2080 has prompted short-term sellers to cover their positions. This could be the signal the bulls have been waiting for after the pair drifted lower in search of support.
As the RSI returns to the neutrality area, the supply-turned-demand zone around 1.2050 is the first level to expect follow-up bids. 1.1900 is a critical support in case of a deeper pullback. On the upside, a close above 1.2300 could pave the way for a bullish reversal in the medium-term.
AUDUSD breaks resistance
The Australian dollar strengthened over better-than-expected retail sales in November. On the daily chart, the price has been grinding along the 30-day average (0.6720). A close above the double top (0.6890) is a sign that the bulls are strongly committed. The psychological level of 0.7000 coincides with the origin of a late August high, making it a key hurdle before the aussie could extend higher. On the downside, 0.6820 is the immediate support and 0.6720 the bulls’ second line of defence in case of hesitation.
SPX 500 attempts to rebound
The S&P 500 rallied after Fed Chair Powell avoided appearing hawkish in his latest remarks. The rally hit a bump in the former demand zone (3950) from December. Selling by previously trapped bulls weighs on the near term price action. If renewed buying could overpower this resistance, the index may progress towards 4050 which is just a springboard to the recent peak at 4120. In the meantime, the upper band (3850) of the previous consolidation range is the closest support, and 3800 a critical level to keep the recovery bias intact.