Intraday Analysis – EUR risks bearish reversal
The euro tumbled after the ECB signalled the end of its interest rate hike cycle. After a short-lived grind over the key demand zone 1.0650-1.0690 around last June’s low, a bearish breakout has seriously dented the bullish bias from the daily chart’s perspective. The round number of 1.0600 is the next step to see if there are signs of support as the RSI sinks into the oversold zone. The support-turned-resistance of 1.0700 is the first hurdle to lift to ease the bearish pressure, or March’s low of 1.0520 could be the next target.
The US dollar rallies on upbeat PPI and retail sales numbers in August. A steep drop has found support at 146.00 which coincides with the 20-day SMA, suggesting that the buy side was swift in loading up the bargain. Sentiment remains upbeat despite the psychological hurdle of 150.00 from last October’s peak looms. A close above the recent high of 147.80 would confirm the bullish fever in the short term and send the greenback towards 149.00. 146.70 is the closest support in case of a prolonged consolidation.
The S&P 500 climbs as the ECB’s pause may foreshadow the Fed’s move to end its tightening. The latest retracement has been contained above 4450 near the origin of a previous rebound, keeping it valid in the process. A new high above 4490 would consolidate the bulls’ confidence and trigger a broader recovery. 4525 from the sell-off earlier this month could be the bears’ last line of defence and its breach may open the door to this summer’s peak of 4600. 4480 is a fresh support to keep the short-term momentum flowing.