Forex Trading Library

Intraday Analysis – USD Finds Momentum

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EURUSD drops lower

The US dollar soared as a mixed jobs report may not be enough to keep the Fed at bay until the year’s end. A previous slip below the daily support of 1.0850 has put the bulls on the defensive and a subsequent jump turned south at 1.0945. A drop below the base of the rebound at 1.0790 has invalidated its momentum and signalled that the path of least resistance would be down. The RSI’s oversold condition might attract some bargain hunting interests around 1.0740. 1.0870 is the first hurdle to clear to weaken the short side.

CADJPY grinds resistance

The Canadian dollar struggles as its economy unexpectedly shrank in the second quarter. On the daily chart, the bulls are still trying to regain the upper hand in a triangle consolidation, which could be a sign of their accumulation, after the rally came to a halt at last October’s peak of 109.40. Despite localised sell-offs the price action seems to be well-supported above 106.60. A close above 107.80 would threaten 108.20, a key level that has capped recent breakout attempts and its breach could send the loonie to 109.40.

GER 40 seeks support

The Dax 40 offset previous gains over lacklustre PMIs across the eurozone. A break above 15960 has led bears to take some chips off the table and this could be a pivotal point for the price action in the coming week. The medium-term trend would remain bullish as long as the quote is above July’s floor of 15500. The pullback has driven the RSI’s into the oversold area, leading to a test of the bulls’ commitment. 15800 is a fresh support with 15600 as a second layer of defence. A close above 16050 would trigger a runaway rally.

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