Intraday Analysis – GBP still under pressure
GBPUSD struggles to bounce
The US dollar advanced after consumer spending grew more than expected in April. The price action is still looking to regain a foothold after breaking above the double top at 1.2440. 1.2310 is the latest level where some buyers have stepped in and they must clear offers around 1.2400 first to alleviate the downward pressure. Then only a close above 1.2470 next to the 20-day SMA would flush out selling interests and pave the way for a sustained rally. On the downside, a lack of support would drive cable towards 1.2200.
EURJPY continues to climb
The Japanese yen weakens as traders expect the BoJ to maintain yield curve control. The pair has held on to its gains after breaking above 149.20, with 148.90 seeing solid bids before the euro started to climb again. A series of higher lows indicates a rising bullish pressure which is likely to attract follow-through buying. The recent peak of 151.50 is a major ceiling ahead and its breach would signal a bullish continuation in the medium-term. On the flip side, a fall below 149.80 would lead to a test of 148.90 on the 20-day SMA.
GER 40 finds support
Equities rallied after the US Treasury extended the deadline for raising the debt limit. The Dax 40’s drop below the daily support of 15800 and the 20 and 30-day SMAs has dented the short-term enthusiasm, shaking off the weak hands. However, the bulls may not have had their last word yet as general sentiment remains upbeat. The demand zone 15700-15720 saw support from trend followers after the RSI recovered from the oversold area. 16100 is the immediate hurdle and a close above 16260 would resume the uptrend.