Forex Trading Library

Intraday Analysis – CAD probes key resistance

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USDCAD struggles to bounce

Chart of USDCAD

The Canadian dollar rallied after May’s unemployment rate came out lower than expected. The major floor of 1.3310 from the daily chart has attracted some bargain hunters but may not be enough to turn the cautious mood around. A bearish breakout would force buyers to bail out and trigger a correction towards last September’s lows near 1.3000, putting a dent to the bullish bias in the medium-term. 1.3400 is a fresh resistance and 1.3500 is a key obstacle to lift before the US dollar could make a sustained comeback.

EURGBP breaks critical floor

Chart of EURGBP

The pound rallied with the prospect of more rate hikes from the BoE amid sticky inflation. The price cut through last December’s low of 0.8560 after it struggled to preserve gains from the past few months. A lack of buying interests left the door open for momentum selling and triggered a new round of sell-off. 0.8500 is the next stop with an oversold RSI likely to attract some dip buyers. However, as sentiment turned wary, the bears may sell into strength at the first resistance of 0.8590. 0.8630 on the 20-day SMA is a strong hurdle.

UK 100 seeks support

Chart of UK100

The FTSE 100 slipped as stresses in the housing sector dented investors’ risk appetite. The rebound came under pressure at the confluence of the brief swing high of 7650 and the 20-day SMA which acts like a dynamic resistance in the current corrective path. A bullish breakout would prompt sellers to cover and ease the downward pressure, paving the way for a recovery to the previous consolidation area around 7800. Failing that, the demand zone 7440-7500 is an important level to prevent a broader liquidation.

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