Intraday Market Analysis – AUD Seeks Momentum Backup

July 7, 2021

AUDUSD retreats from major resistance

The Australian dollar surged after the RBA announced it would trim its QE by $1 billion.

The initial rally above 0.7525 has put the bears under pressure. A bullish MA cross suggests strong buying interest in reversing the correction.

Price action has retracted from the major supply area around 0.7600. The RSI’s double-dip into the overbought zone may have hindered its advance.

A bullish breakout would trigger an extended rally to 0.7700. 0.7460 is a critical floor as the Aussie seeks support.

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USDJPY tests critical support

The US dollar drifts lower as traders await the Fed minutes.

The greenback has met stiff selling pressure at March 2020’s high, at 111.70. A combination of profit-taking and fresh selling has pushed the pair down to the base of the latest rally (110.40).

Price is now at a crossroad as a bearish breakout may trigger a correction towards 109.80.

However, a near-oversold RSI may attract buyers in the demand zone. A rebound will need to clear the psychological level of 111.00 first before it could retest the previous high.

EURGBP bounces off key demand zone

The euro whipsawed higher after the eurozone’s better-than-expected retail sales in May. The single currency saw strong buying interest at the key demand zone of 0.8530.

Early bulls have seen an oversold RSI as a buying opportunity. Momentum above 0.8560 indicates that sellers may have rushed to close their positions. The RSI has reemerged back to the neutral area.

0.8580 is the next target, its breach could clear the path for 0.8610, the top of the recent consolidation range.

By Orbex