Forex Trading Library

Intraday Analysis – USD meets limited support

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USDCAD bounces higher

The Canadian dollar softened as preliminary data showed the GDP contracting in June. The pair has been looking to hold onto the gains from its recent rebound above 1.3090 and a series of higher lows suggests a mounting buying pressure. A break above 1.3240 has prompted sellers to cover some of their bets, further easing the opposite pressure overhead. 1.3300 is the next resistance and its breach may attract momentum buyers and trigger an extended rally above 1.3400. On the downside, 1.3190 is the immediate support.

EURGBP grinds support

The euro struggles over weak economic sentiment and inflation expectations. The price has been drifting lower since it hit resistance in the daily supply zone around 0.8700. 0.8535 at the origin of a breakout rally in mid-July is a key level to see if the bulls could stand their ground. While the RSI’s oversold condition has brought in some bargain hunters, they will need to clear the top of the brief bounce at 0.8600 before a sustained recovery could take shape. Otherwise, the euro could be vulnerable to a sell-off below 0.8500.

US 30 sees limited pullback

The Dow Jones bounces as an easing PCE price index may further lighten the burden on the Fed. The index came short of the February 2022 high of 35850 and a break below the immediate support of 35330 has forced some short-term buyers to exit. The RSI’s bearish divergence combined with its overbought status on the daily chart is a sign of overextension and buyers may refrain from being over-exposed. 35650 is a fresh resistance and a fall below 35200 would trigger a deeper correction to 34500 on the 30-day SMA.

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