Intraday Market Analysis – Recovery Momentum
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EURUSD breaks above key resistance
The euro recoups last month’s losses as traders reposition themselves for this week’s ECB meeting.
After a few days of consolidation under the key level of 1.1990 from the daily chart, the strong momentum above this resistance is a confirmation that buyers are in control of the price action.
1.2110 would be the next target as the pair makes its way back.
An overbought RSI may lead to a brief pullback. If so, the demand area between 1.1880 and 1.1940 may see strong buying interest.
USDJPY faces strong supply
The market’s expectation of further falls in US Treasury yields keeps sending the greenback lower.
The pair’s successive breakouts below the daily moving averages and the critical support at 108.40 have triggered a new round of sell-off.
There is a chance of a rebound as traders take profit after the RSI went deeply into the oversold territory. Bears are likely to sell into strength in the supply zone around 108.90.
On the downside, 107.80 would be the next target as a continuation of the bearish momentum.
SP 500 tests rising trendline
Major stock indices stay high on hopes that the recovery is firmly on track. The S&P 500 has been grinding up along a rising trendline established earlier this month.
However, a double top in the RSI’s overbought area may temper buyers’ willingness to chase bids.
The trendline (4150) is the immediate support as the index makes a retreat. 4120 is a key level to keep the uptrend intact in the short term.
On the upside, the psychological level of 4200 could be the target as buyers push for a new record high.
