Intraday Market Analysis – USD Shows Weakness
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USDCHF struggles to bounce
The US dollar softened after November’s nonfarm payrolls missed the mark.
The pair has met stiff selling pressure at 0.9270, a former support that had turned into a resistance. The bullish RSI divergence suggests a slowdown in the sell-off though there is no confirmation yet for a sustainable bounce.
0.9120 is a key demand area on the daily timeframe and a bearish breakout would invalidate the November rebound. Buyers may switch sides as sentiment further deteriorates, exacerbating volatility to the downside.
CADJPY breaks higher
The Canadian dollar surged after November’s unemployment rate fell to 6%. A bearish MA cross on the daily chart still indicates a pessimistic mood.
An oversold RSI on the hourly chart caused a limited bounce as short-term traders took profit. Sellers are eager to fade rebounds with the latest being at 89.20. 87.20 at the base of the October rally would be the next support.
A deeper correction may send the loonie to 85.90. The bulls will need to lift said resistance before they could initiate a reversal.
UK 100 attempts to rebound
The FTSE 100 recouped some losses bolstered by a weaker US jobs report. The index saw buying interest over the psychological level of 7000 which sits in the daily demand zone.
The RSI’s double-dip in the oversold area has attracted a ‘buying-the-dips’ crowd in this congestion area. A close above the immediate resistance at 7150 is an encouraging sign of a bullish attempt.
7310 is a major hurdle ahead, its breach could short circuit the correction. 7060 is the closest support in case of weakness in the rebound.
