Intraday Market Analysis – Whipsaw Catalyst
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USDCAD breaks out of range
The Canadian dollar surged after the BoC announced a reduction of its asset purchasing program.
After a month-long consolidation, the loonie may have finally found momentum to break free. The sell-off below 1.2470 suggests strong selling interest and potential for bearish continuation. The price may retrace briefly after the RSI shot into the oversold zone.
1.2650 is the immediate resistance and 1.2420 would be the next target. A combination of short-covering and fresh buying could send the price to 1.2360.
EURGBP falls from key resistance
Sterling rises higher as the UK’s core CPI accelerates to 1.1% YoY. The euro has met stiff selling pressure at 0.8720, a key resistance on the daily timeframe.
Successive breakouts below 0.8670 then 0.8640 are a sign that sellers have taken control of the short-term direction.
The RSI has recovered into the neutrality area, leaving the price vulnerable at the end of the current consolidation. The support-turned-resistance 0.8670 may cap a rebound.
A drop below 0.8590 could trigger a new round of sell-off.
XAUUSD grinds along rising trendline
Bullion advances higher as the dollar index stays muted at a seven-week low. The price action has been in consolidation following a recent rally above 1757.
A neutral RSI may suggest there is still room on the upside. 1814 from the daily chart is a major resistance, and its breach could trigger a reversal. On the downside, 1777 is the immediate support in case of a pullback.
Further down, 1760 along the bullish trendline is a congestion area and may see strong buying interest from short-term trend-followers.
