Intraday Analysis – USD awaits catalyst
EURUSD breaks higher
The US dollar struggles as the market prepares for a 25-basis-point rate hike by the Fed. A pop above last week’s liquidation point at 1.0760 sends a strong bullish signal, prompting sellers to cover their bets. As the RSI rose into overbought territory, the bulls may see a pullback as an opportunity to stake in at a discount with 1.0700 at the base of the momentum as the first support. A close above the February spike of 1.0800 would reinforce the upward bias and open the door to an extension to the supply zone around 1.0900.
USDCAD bounces back
The Canadian dollar slipped as February’s monthly CPI fell short of expectations. After lifting offers around the December high of 1.3700, the US dollar has been drifting lower in search of bids. Overall sentiment remains upbeat from the daily chart’s perspective. The demand zone above 1.3600 over the 30-day SMA has caught buyers’ eyes once again. A successful rebound would keep the greenback in the lead. 1.3810 right under the recent peak (1.3860) is a key hurdle and its breach would extend gains towards 1.4000.
UK 100 attempts to rebound
Equities recover as investors reposition ahead of the Fed decision. A surge above last Friday’s high of 7500 has alleviated the pressure on the FTSE 100 but the buy side is not out of the woods yet. 7630 from a previous faded bounce is a key resistance where trapped buyers and new sellers could drive the bids lower. However, a bullish breakout would suggest that the path of least resistance is up and a meaningful recovery above 7740 near the 20-SMA could then take shape. 7420 is a fresh support in case of further hesitation.