Forex Trading Library

Intraday Analysis 04.07.2024

GBP Bouncing Ahead of General Election

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USDCHF divergence threatens to fall lower
USDCHF Chart: Shows recent movement with bearish RSI divergence and key support/resistance points.

The US dollar fell from its recent high after a bearish divergence emerged on the RSI. Following a pop above the psychological level of 0.9000, a brief pullback was contained as bulls held their nerve. A break above 0.9060 on the 20-day SMA would signal that bulls have regained control of the price action and open the door to 0.9150, right under May’s peak. On the downside, 0.8950 is critical in keeping the rebound mode intact.

GBPUSD looking for direction
GBPUSD Chart: Illustrates pre-election bounce, emphasizing key support and resistance levels amidst GBP election impact.

Cable found some support in the run-up to today’s General Election, highlighting the GBP election impact on the currency pair. The latest move has met bids after bouncing off the latest support at 1.2620. A bullish RSI divergence indicates a slowdown in the sell-off momentum and could attract more long-term interest. 1.2730 is the first hurdle, and its breach would make the pair retest the recent high of 1.2850. Otherwise, a fall below 1.2600 would trigger a new round of sell-off below 1.2500.

GER 40 ticking higher
GER 40 Chart: Shows GER 40's upward trend, noting critical support and resistance levels.

The Dax was another index recently boosted due to a stock jump. The price action continues to capitalise on its break above the psychological level of 18000. The support-turned-resistance of 18350 at the top of the recent bullish channel could be the sellers’ last stronghold, as its breach would signal a bullish continuation. As the RSI moves back into the neutral area, 17800 is critical to keep the push going.

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