Intraday Market Analysis – USD Rally Accelerates
EURUSD seeks support
The US dollar surged after May’s inflation beat expectations. The previous rebound’s failure to clear the supply area around 1.0760 indicates that the path of least resistance is down. A sharp drop below 1.0640 and 1.0540 forced the bulls to cut losses. The RSI’s oversold condition may cause a limited bounce. 1.0460 at the base of a bullish breakout is a key support. Its breach would invalidate the recovery and send the euro back into a downward trajectory. The bulls will need to lift 1.0640 before they could regain control.
USDCAD breaks higher
The Canadian dollar struggles against its US counterpart over red-hot US inflation. A break above the supply zone around 1.2680 has put the greenback on a reversal course. A combination of short-covering and momentum buying is sending the pair to the daily resistance at 1.2880. A bullish breakout could resume the rally in the medium-term. The RSI’s overbought situation may cause a temporary pullback as traders may refrain from chasing after bids. 1.2680 has turned into a support where the bulls may look to accumulate.
UK 100 struggles for bids
The FTSE 100 tumbles as risk appetite recedes amid growth concerns. On the daily chart, the index has met stiff selling pressure at the double top (7650). A fall below 7520 has triggered a round of liquidation which suggests a lack of commitment from the buy side. 7240 is the next support as the RSI sank into the oversold area. Further down, the daily support at 7160 is a critical floor to keep the index afloat. A bearish breakout could trigger a sell-off towards 7000. 7450 is the closest resistance in case of a rebound.