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Intraday Analysis – USD holds onto gains

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USDCAD tests resistance


The Canadian dollar slides as oil prices struggle amid worries about demand in China. The pair is capitalising on its rebound from 1.3630 as overall sentiment has remained positive. The supply zone 1.3850-1.3890 near the sell-off point earlier this month could be the bears’ last stronghold and its breach would stir up volatility and signal a bullish continuation above 1.4000 in the days to come. On the downside, the latest swing low of 1.3750 coincides with the 20-day SMA, making it an area of interest in case of a fallback.

EURGBP consolidates gains


The pound clawed back some losses after Britain’s GDP avoided a contraction in the third quarter. A surge above 0.8735 at the top of a previously faded bounce indicates that the bulls have made their way back. As the sell side is forced to trim their positions, the path is clear for a new round of rally towards last May’ high of 0.8830 with 0.8770 as an intermediate resistance. In the meantime, the RSI’s overbought condition may temporarily limit the upside and 0.8715 would be the first level to gauge the strength of follow-up buying.

US 30 breaks higher


The Dow Jones 30 jumped as US Treasury yields pulled back from their 16-year highs. A break above the October high of 34100 prompted short-term bears to exit, helping the market mood stabilise after three months of correction. The RSI’s bearish divergence showed a deceleration in the rebound but was not enough to deter the bullish fever. A brief retreat was rather an opportunity for the bulls to accumulate and saw renewed interests around 33900. 34500 near the mid-September sell zone is the next threshold.

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