GBPUSD bounces back
Sterling advanced after the Bank of England stressed on keeping rates high for a prolonged period. Despite resistance around 1.2720 at first, the bulls seem to be undeterred by this supply area. An initial 120-pip green engulfing candle indicates robust support from 1.2500, prompting short-term sellers to cover. A close above the said resistance would pave the way for a continuation towards 1.2820 then potentially to July’s high of 1.3150. On the downside, 1.2610 is a fresh support should the bulls look to consolidate their gains.
USDCHF tests key floor
The US dollar tumbles as traders expect the Fed to cut rates before its Swiss counterpart. The pair’s hesitant bounce last week has failed to clear any significant hurdle then a convincing break below 0.8740 suggested that the path of least resistance was down, forcing the latest buyers to scramble for the exit. The demand zone 0.8560-0.8620 at last summer’s lows is critical in keeping the greenback afloat in the medium-term as its breach would open the door to 0.8400. 0.8720 is the immediate resistance in case of a rebound.
SPX 500 hits resistance
The S&P 500 holds onto its gains as US Treasury yields slide amid growing rate cut speculations. The rally further gained momentum after clearing March 2022’s high of 4630. 4740 at the start of a sell-off in January is the next hurdle before the index could reclaim the all-time high of 4810. As the RSI shoots again into overbought territory, a pullback could be necessary to give the parabolic rise some breathing room. 4645 would be the first support should a combination of profit-taking and fresh selling drive the quote lower.
