Forex Trading Library

Intraday Analysis – Dax attempts to bounce back

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USDCAD tests support

Chart of USDCAD

The Canadian dollar bounced on upbeat retail numbers in January. On the daily chart, the upward bias remains intact with the two-week long pullback securing solid buying over 1.3630 at the confluence of the 20-day SMA and the base of the March breakout rally. A surge above 1.3740 forced sellers to cover, stirring up volatility in the process. A close above 1.3810 would resume the uptrend above October’s high of 1.3970. As the RSI returns to neutral territory, 1.3710 is the closest level to expect renewed interest.

EURGBP seeks support

Chart of EURGBP

The euro fell as plunging European banking stocks weighed on sentiment. A drop below the first support at 0.8810 has dented the momentum. 0.8770 is the next level to see if buyers would be able to keep the latest rebound valid, or they would be up against a wall if the pair revisits the critical floor at 0.8730. Its breach would lay the foundation for a bearish reversal in the medium-term. The RSI’s oversold condition attracted some bargain hunters and a close above 0.8860 would open the door to this month’s high of 0.8920.

GER 40 holds on to gains

Chart of DE40

The Dax 40 pared losses as central bankers tried to ease fears of a liquidity crisis. The bulls have had a hard time pushing beyond the area of congestion formed by the support-turned-resistance of 15300 and the 20-day SMA. A break below the psychological level of 15000 took out some weak hands. The demand zone around 14800 goes back to January’s bullish breakout and is critical to keep the bounce valid. As the trading range narrows between these significant levels, a breakout on either side would dictate the next move.

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