21 Oct

Intraday Market Analysis -GBP Consolidates Gains

October 21, 2021

By Orbex

GBPUSD seeks support

GBPUSD

The pound’s rally stalled after Britain’s core CPI dropped below 3% in September. The pair’s recovery has picked up the pace after a close above the daily resistance at 1.3730.

1.3900 is the main hurdle and a bullish breakout would resume the uptrend. However, the RSI’s triple top in the overbought area indicates an overextension. A pullback is necessary to let the bulls consolidate their gains.

The supply-turned-demand zone around 1.3710 is the first level to watch for. Its breach may trigger more profit-takings towards 1.3630.

USDCAD sell-off continues

USDCAD

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The Canadian dollar rallied after solid inflation data in September. The US dollar has found little buying interest near July’s lows (1.2310).

A bullish RSI divergence out of the oversold area suggests a deceleration in the downward momentum. But buyers need confirmation of a reversal, and a break above 1.2370 would be the first step to force sellers to cover.

Sentiment remains bearish unless the pair lifts offers around 1.2500. Failing that, the greenback could be vulnerable to a new round of sell-off towards 1.2250.

USOIL gains support

USOIL

WTI crude bounced back after the EIA reported a surprise drop in US inventories.

A previous double top had indicated potential exhaustion as the price struggled to achieve a higher high. However, the price has found support at 81.00 as buyers were eager to stake in at a better price.

Overall sentiment remains upbeat and a close above at 83.80 may trigger an extended rally to 86.00. An overbought RSI may temporarily limit the momentum. But as long as the price is above the said support the directional bias stays bullish.

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