EURUSD drifts lower
The euro slipped as consumer price growth extended its downward trend in July. The pair is still probing for support after coming off a 17-month high of 1.1250. A break below the 20-day SMA at 1.1030 has put early buyers on the defensive and could lead to a deeper correction to the lower band of a previous consolidation range and the daily support of 1.0840. The brief support of 1.1100 has turned into a resistance level and bears may look to sell into strength as short-term sentiment remains cautious for now.
GBPJPY sees V-shaped bounce
The yen whipsaws as traders digest the BoJ’s tweak to its yield control policy. A decisive close above the immediate resistance of 181.90 prompted sellers to cover their bets and may have put the pound back on track despite a flash sell-off. The July high of 184.00 is the last obstacle and its breach would bring more conservative buyers back to the game and pave the way for a bullish continuation towards 189.00. In the meantime, the RSI’s overbought condition may cause a limited pullback with 180.90 as the first support.
GER 40 reaches new all-time high
The Dax 40 inches higher thanks to cooling inflation across the eurozone. A rally above the June high of 16430 is a sign that the bullish mood is still intact from the medium-term perspective. 16600 is the next all-time high as trend followers are likely to hold onto the direction. As the RSI shows a repeatedly overbought condition, a brief fallback could be seen as an opportunity to stake in at a discount. The resistance-turn-resistance of 16430 is the first level and 16200 a second layer to test buyers’ resolve.
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