Forex Trading Library

Intraday Analysis – S&P 500 to hit 2-year high

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AUDUSD holds onto gains

The Australian dollar edged higher after the latest RBA minutes revealed lingering discussions about rate hikes. A decisive break above 0.6680, a major hurdle from last August’s sell-off is a sign of a solid bullish bias. However, a pullback in the near-term cannot be excluded to let the bulls consolidate their gains before they could push for a new round of rally above 0.6800. The resistance-turn-support of 0.6670 is the first level to expect follow-throughs and 0.6570 an important one to maintain the momentum.

EURGBP bounces back

The pound struggles as the prospect of rates remaining higher might be a headwind for the economy. Even though the price previously hit resistance at 0.8630 at the confluence of a former daily support and the 20-day SMA, it has found strong support over 0.8575 and a bullish breakout has prompted sellers to cover their positions. This suggests that medium-term sentiment has remained optimistic and would pave the way for a sustained recovery to the supply zone around 0.8680, then to the November peak of 0.8760.

SPX 500 inches higher

The S&P 500 climbs as investors bet against Fed officials’ warnings about “getting a little bit ahead”. As the index flirts with the all-time high of 4815 from two years ago, the market is still digesting last week’s thrust above 4700. Selling could be expected near that peak as buyers may look to take some chips off the table while sellers await to fade the rally. 4645 is the immediate support to gauge trend-followers’ commitment and 4580 near the 20-day SMA would be the bulls’ second layer of defence in case of a correction.

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