Intraday Analysis – USD sees sustained momentum
The yen tries to stabilise as Japan’s Finance Minister warns of potential intervention. The pair continues to grind its way up after lifting offers around 149.00 at the start of a sell-off back in November. A series of higher lows along the 20-day SMA suggests that the mood is still upbeat and may attract trend followers aiming for 150.00. As the RSI recovers from the overbought area, the bulls might see a pullback as an opportunity. 148.30 is the closest support and 147.40 on said moving average a second layer of protection.
Cable drops as Fed officials talk about the need for more rate hikes. As a sign of overall bearish sentiment, the 20-hour SMA has so far kept the price in check. The RSI’s repeatedly oversold situation might cause a snapback if sellers start to take chips off the table. However, the bears could look to sell into strength due to downward inertia. 1.2280 would be the first resistance to expect renewed short interests and only a rise above 1.2420 on the 20-day SMA would turn things around. Otherwise, 1.2100 would be the next stop.
The FTSE 100 struggles as Treasury yields hit a 16-year high amid resilient US economic data. The index is still striving to hold onto its gains after clearing July’s peak of 7720. 7530 at the base of the breakout rally in mid-September is an important level to maintain the current momentum and the breakout bias. Failing that, the swing low of 7400 would be a critical level to keep this month’s rally intact as its breach would expose the double bottom at 7220. On the upside, 7680 is the immediate hurdle to lift to resume the advance.