Forex Trading Library

Intraday Analysis – The Dollar Turnaround Begins

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The FTSE 100 falling from its peak
FTSE 100 chart: The FTSE 100 showing signs of decline amid fears of a second-quarter recession, with RSI indicating overbought condition.

The FTSE 100 turned lower on fears of a deep recession in the second quarter. The RSI’s overbought condition indicates overextension, though there is no confirmation of a fallback yet. 7650 is the immediate support, and its breach could open a bear rally in the next few sessions. 7500 would be a key level to gauge the strength of follow-up interests. On the upside, a close back above 7750 would resume the uptrend.

EURUSD bounces back
EURUSD chart: Upward trend in EURUSD supported by upbeat PMIs in February.

The Euro extended gains helped by upbeat PMIs in February. The bounce away from the 20-day moving average suggests a correction is due after a long bearish rally. The pair has moved over 100 pips higher as the greenback ran out of steam. 1.0880 is the next hurdle before a full recovery can be confirmed, with the 1.09 level in sight. Failing that, resistance at 1.0840 could see a slight correction retest to 1.08 soon.

USDCAD hitting higher highs
USDCAD chart: USDCAD moving towards higher highs amidst subdued BoC and bullish divergence.

The Canadian dollar fell from its peak towards 1.36 as easing inflation kept the BoC subdued. With a series of higher highs benefitting the pair, the current downside move has hopes of a turnaround and that bulls could regain control of the direction. 1.3440 is a fresh support, and 1.3360 is a critical level to keep the upward bias intact, with a bullish divergence in play. Some resistance could be felt near the previously failed move at 1.3530 before the rally could extend to the daily resistance of 1.3580.

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