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Intraday Analysis – USD tries to recoup losses

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USDJPY attempts to bounce

Chart of USDJPY

The US dollar strengthens as March’s jobs data shows solid fundamentals. The price action is at a crossroads on the daily chart, with a bearish MA cross suggesting an acceleration to the downside on the one hand and a tentative bounce off the daily low of 130.00 on the other. A break of this psychological level may cause prolonged weakness. 131.50 is the immediate support on the hourly chart and 133.00 the first hurdle the bulls will need to lift. Only a close above 133.70 would help the greenback recover in a sustainable fashion.

EURGBP grinds key support

Chart of EURGBP

The euro firms up as the ECB’s chief economist calls for further rate increases. Overall sentiment remains cautious as the pair hovers above the double bottom from the January and March lows at 0.8720. The RSI’s oversold situation attracted some bargain hunters but the bulls will need to push past 0.8820 before they could hope for a broader recovery above 0.8860. Otherwise, the path of least resistance would be down and the single currency could be vulnerable to a round of liquidation with buyers scrambling for the exit.

SPX 500 holds on to gains

Chart of US500

The S&P 500 as the labour market’s cooling may allow the Fed to moderate its stance later this year. A bullish MA cross on the daily chart is a sign of improved sentiment after the index cleared the March high of 4050. The current pullback from 4140 is an opportunity for the bulls to take a breather after the RSI shot into the overbought area. 4050 has turned into a support level. Further down, the psychological level of 4000 at the confluence of the base of the late March breakout rally and the 20-day SMA is a major floor.

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