EURUSD holds onto gains
The euro bounced after the retail sales showed a smaller-than-expected contraction in September. A surge to an eight-week high has prompted a number of sellers to cover their bets, potentially putting the single currency on a reversal course. The next step is to see how strong follow-through interests will be. The RSI’s oversold condition has attracted some bargain hunters and 1.0620 near the base of the breakout rally is an important level to sustain the momentum and a jump above 1.0750 would confirm the bullish bias.
GBPUSD probes support
Cable steadies as BoE Governor Bailey remarked it was too soon to talk about cutting rates. The pair has met stiff selling pressure in the former demand zone 1.2400-1.2450 from the daily chart and the current retreat is a test to the buy side’s commitment. 1.2190 at the base of last Friday’s bullish candles is the first level to expect renewed buying interests as the RSI recovers into the neutral area. The bottom at 1.2100 is a second line of defence in case of further hesitation while 1.2330 is the immediate resistance at a rebound.
GER 40 hits resistance
The Dax 40 ticked higher backed by strong third-quarter corporate earnings. After hitting resistance at 15300, the index is at a crossroads as it strives to keep the gains from its bounce from the critical demand zone 14500-14600 near last March’s bottom. A bullish breakout would force more bears to close out and challenge the October high of 15550, raising the odds of a bullish continuation in the medium-term. The psychological level of 15000 is the first support to assess the strength of follow-up buying.
