Intraday Analysis – USD stays high
The euro weakened as traders doubled down on the rate differential after the ECB’s pause. After breaking below May’s low of 1.0650, a limited bounce came to a halt at 1.0740 on the 20-day SMA, suggesting that the dynamic resistance was in force. Then a subsequent fall below 1.0630 then 1.0600 indicates that the path of least resistance is still down, which could continue to attract bearish participants. Last March’s lows near 1.0520 are the level to see if buying would pick up again and 1.0650 would be the first hurdle to lift.
Gold slips as the Fed’s hawkish view propels US Treasury yields higher. The price is struggling to hold onto its recent gains following its break above the supply zone 1940 from a sell-off earlier this month. 1910 at the base of the latest rebound is an important level to sustain the bullish thrust as its break would force buyers to abandon ship, prolonging the sideways action below 1900 at best. The support-turned-resistance of 1930 is the closest resistance and its breach may trigger a runaway rally above the recent peak of 1950.
The Dax 40 sinks as bond yields climb amid worries that borrowing costs may stay high for a while. A slide below the double bottom at 15500 on the daily chart has put the bulls on the defensive. 15610 has turned into a fresh resistance and a rebound could be a mere get out of jail free card for trapped positions in this demand zone. As the RSI sinks into the oversold area, 15300 at a 6-month low is the next stop to see if the price action would stabilise or become vulnerable to a deeper correction below 15000 in the medium-term.