Intraday Market Analysis – GBP Attempts Reversal
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GBPUSD bounces off triple bottom
The pound surged after the Bank of England raised its inflation forecast.
The pair has met strong buying interest at the triple bottom (1.3600) on the daily chart. A bullish RSI divergence was an indication that the sellers have taken their feet off the pedal.
A subsequent rally above 1.3690 would prompt more bears to cover. An overbought RSI may temporarily limit the initial impulse.
Patient buyers would be waiting for a pullback before jumping in. A rebound above 1.3800 would challenge the September high at 1.3900.
USDCHF tests Fibonacci level
The Swiss franc softened after the Swiss National Bank pledged to keep its policy loose.
The US dollar saw an acceleration in its momentum after it cleared the daily resistance at 0.9260. The RSI’s double top has triggered a pullback to let the bulls catch their breath.
The pair has found bids at the 61.8% (0.9220) Fibonacci retracement level. A break above 0.9280 would resume the rally towards April’s peak at 0.9460.
A bearish breakout could send the greenback to 0.9160, a key floor to keep the uptrend afloat.
USDCAD tests key support
The Canadian dollar halts its advance as July’s retail sales unexpectedly show a contraction.
The pair has met stiff selling pressure near the August high (1.2950). The pullback is testing the key support at 1.2635. An oversold RSI may attract some bids. Then the bulls need to lift 1.2795 for continuation.
Failing that, a bearish breakout would dent the optimism and those who previously bought in this demand area would have to get out. Then 1.2500, a is major support on the daily chart, would be the second line of defense.
