AUDUSD grinds support
The higher-beta Australian dollar consolidates gains as risk appetite holds its ground across markets. The latest rebound has met stiff selling pressure in the support-turned-resistance of 0.6620. The price action is at a major crossroads as it tests the recent double bottom of 0.6520 which coincides with the 20-day SMA. A bearish breakout would trigger a wave of liquidation and send the Aussie to the base of its mid-November rally at 0.6420. On the flip side, a bullish close might extend the gains to August’s high of 0.6740.
EURGBP to test critical floor
The pound advances as traders expect the BoE to push back easing expectations. The pair continues to struggle for bids as it approaches September’s low of 0.8525. The RSI’s oversold condition on the daily chart may attract some bargain hunters but they will need to lift offers around 0.8590 to ease the pressure first. Then the former daily demand zone near 0.8630 would be the major hurdle to go before short-term sentiment could turn around. On the downside, a breakout could lead to a bearish reversal.
GER 40 holds onto new high
The Dax 40 holds onto gains as investors await the ECB’s policy hint at the upcoming meeting. An extension above last summer’s high of 16500 has set the course for a fresh all time-high at the psychological level of 17000. Sentiment is overwhelmingly positive but the vertical climb also has propelled the daily RSI well into the overbought area, which suggests that a pullback could be due to let the bulls catch their breath. 16600 is the immediate support and 16200 on the 20-day SMA another level to expect trend followers’ interests.
