Intraday Market Analysis – GBP In Key Supply Zone
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The sterling hit the brakes after the UK’s retail sales fell for the fifth month in a row in September.
The pair has been inching up towards the hurdle on the daily chart (1.3900). The RSI’s bearish divergence, however, shows less enthusiasm from buyers as the price approaches the major resistance.
Sentiment remains bullish but we can expect profit-taking. 1.3710 would be the first support to monitor in case of retracement. On the upside, a bullish breakout may trigger an extended rally to 1.4000 and signal a potential reversal.
The sterling hit the brakes after the UK’s retail sales fell for the fifth month in a row in September.
The pair has been inching up towards the hurdle on the daily chart (1.3900). The RSI’s bearish divergence, however, shows less enthusiasm from buyers as the price approaches the major resistance.
Sentiment remains bullish but we can expect profit-taking. 1.3710 would be the first support to monitor in case of retracement. On the upside, a bullish breakout may trigger an extended rally to 1.4000 and signal a potential reversal.
CADJPY hits 6-year high
The Canadian dollar slipped despite solid retail sales numbers in August. The pair has come under pressure at a six-year high (93.00).
A bearish RSI divergence indicates a loss of momentum as the bulls proceed with caution in this key supply zone. A repeatedly overbought situation has been calling for a consolidation and might limit their risk appetite.
A break below 91.80 would prompt more buyers to bail out. The psychological level of 91.00 from last June’s peak would turn into the second line of defense.
GER 40 tests daily resistance
The DAX 40 found support after Germany’s manufacturing PMI beat the consensus.
The latest rally above the 30-day moving average is a strong bullish signal. And after a brief horizontal consolidation, the index is climbing towards the key hurdle at 15700. A bullish close above this daily resistance would throw the bears off balance.
A combination of short-covering and momentum buying may heighten volatility. This is a prerequisite before the uptrend could resume. On the downside, 15400 is the immediate support in case of a pullback.
