Forex Trading Library

Intraday Analysis – USD continues to slide

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USDCAD tests major floor

Chart of USDCAD

The Canadian dollar advanced after the Bank of Canada hiked its overnight rate by 25 basis points. The pair has turned south at the support-turned-resistance of 1.3380 from a previous lengthy consolidation on the daily chart. This is a sign of relief from trapped buyers but may not be enough to renew interest in the greenback. A slide below the immediate support of 1.3280 showed a lack of follow-through bids, putting those who bet on a bounce on the defensive. 1.3120 is a critical floor and 1.3290 the first hurdle to lift.

NZDUSD breaks higher

Chart of NZDUSD

The US dollar plunged after further moderation in June’s CPI may leave only one Fed hike on the table. The kiwi previously met stiff selling pressure at the mid-June peak of 0.6240 as buyers took some profits home. Its convincing breakout signals renewed strength, turning it into a fresh support in the process. More buyers could join the game as the RSI’s overbought condition may cause a brief pullback. May’s peak of 0.6380 is an important hurdle and its breach could lay the groundwork for a recovery in the medium-term.

UK 100 bounces back

Chart of UK100

Global equities find relief in sustained signs of cooling US inflation. The FTSE jumped back after the sell-off came to a rest near the March lows of 7230 and a bullish RSI divergence indicated that the downward pressure was waning. A combination of short-covering and buying-the-dips has helped the price recover some lost ground. The first real test comes in at the former support of 7430, and a bullish breakout would attract those who are still indecisive. Otherwise, the index would fall back to 7290 or lower.

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