Intraday Market Analysis – USD Rally Slows Down

USDCAD awaits breakout

The Canadian dollar recovered after July’s GDP growth beat expectations.

The daily chart still favors the greenback even though the hourly price action is stuck in a narrowing range between 1.2600 and 1.2800. The indecision would end with a breakout that will dictate the direction for the next few days.

Multiple tests of the demand zone around 1.2600 suggest solid interest in keeping the uptrend intact. A bullish breakout would cause another attempt at August’s peak (1.2950), whereas a bearish one would lead to a revisit of 1.2500.

EURGBP tests demand zone

The pound swings higher likely due to profit-taking, following a sharp sell-off. The euro’s surge has hit a speed bump at July’s high (0.8660).

An overbought RSI and its bearish divergence have prompted short-term buyers to take chips off the table. The support-turned-resistance at 0.8620 capped a rebound.

The upside bias is still valid as long as the pair is above 0.8525, the base of the latest rally. The bulls may trigger an extended rally if they can lift 0.8625. Failing that, the price may drop to 0.8485.

SPX 500 faces key hurdle

The S&P 500 struggles as concerns over economic slowdown spread. A bearish MA cross on the daily chart indicates that sentiment has turned sour.

The fall below 4340 has shattered the hope of a quick rebound. The index is testing last July’s low at 4270. A repeatedly oversold RSI has triggered a buying-the-dips mentality.

The early bulls will need to close above 4400 before they could attract momentum buyers’ attention. Otherwise, the bears would be eager to sell into strength.