Intraday Market Analysis – GBP Forms Bearish Divergence
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GBPUSD retreats from major resistance
The pound slips due to concerns over possible delays to June 21 lockdown lifting. The pair saw strong selling interest at the supply zone (1.4200) from last February. The RSI’s failure to achieve a higher high as opposed to the price action indicates exhaustion.
Divergence near a key resistance could be a forward warning for a correction. The drop below 1.4160 is a confirmation of weak demand. A break below 1.4100 may send the pound to the psychological level of 1.4000.
On the upside, the peak at 1.4250 has become resistance.
GER 30 grinds towards new high
The DAX stays muted following Germany’s downbeat retail numbers in April. The index is looking to hold on to its recent gains after it broke into new highs.
On the daily chart, the 20-day moving average crossing above the 30-day one suggests an acceleration in the rally after a month-long consolidation. 15800 would be the next target as trend followers rejoin the action.
In the meantime, the latest surge has sent the RSI into the overbought area. A temporary pullback is likely to seek support above 15410.
USOIL climbs to 3-month high
Oil rallies as markets expect delays in the Iran nuclear talks. WTI crude has rallied above the March peak at 67.90. This is an indication that buyers have regained control of the direction.
The bulls have cleared the way to 70.00 even though the path could be choppy due to intraday volatility. The price is inching up along the 30-hour moving average. A high RSI may prevent traders from chasing after the momentum.
Around 66.70 is a key area of congestion after it turned from resistance into support.
