Forex Trading Library

Intraday Market Analysis – USD tests key supports

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EURUSD recoups losses

Chart of EURUSD

The US dollar tanked after wage growth was slower than expected in December. The pair previously came under pressure near last June’s highs around 1.0750. A double top at 1.0710 capped the euro’s advance and led to a correction. A three-leg sell-off below 1.0520 prompted some buyers to bail out but strong support has been observed in the demand zone 1.0450-1.0480.

A bounce above 1.0630 may help the bulls regain confidence, making 1.0600 a fresh support. A close above 1.0710 would extend the rally towards 1.0800.

USDCAD tests major support

Chart of USDCAD

The Canadian dollar surged after its labour market’s strong performance in December. Renewed selling pressure has driven the pair below the swing low at 1.3470 from the start of the year, which suggests a lack of support. The daily level and December’s low of 1.3390 is a critical floor and its breach could lead to a bearish reversal below 1.3300. As the RSI inches to the oversold area, the demand zone may trigger a ‘buy-the-dips’ behaviour. 1.3560 would be the first hurdle should the greenback manage to bounce back.

US 30 breaks higher

Chart of US30

The Dow Jones 30 bounces as mixed US job data may temper the Fed’s hawkishness. The swings between 32500 and 33500 along the 30-day moving average showed a temporary equilibrium between supply and demand. A bullish breakout means that the recovery bias is still intact and 32900 is now the immediate support. 34350 at the origin of the mid-December trough is an important resistance. The bulls would have the last laugh if they succeed in pushing past it, resuming the rally from last October.

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