By Orbex
GBPUSD attempts to rebound
The sterling consolidates as BOE officials stress due to inflationary pressure from a tight labor market. So far, rebounds have been an opportunity for trend followers to sell into strength.
The pound is testing last December’s demand zone around 1.3200. An oversold RSI may help lift bids momentarily as sellers take profit.
1.3300 is the immediate resistance. Then the bulls will need to clear the origin of the latest sell-off at 1.3370 to attract more buying interest. On the downside, a breakout would send the price to 1.3100.
NZDUSD sticks to downtrend
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The US dollar edged higher thanks to a rally in Treasury yields. Increasing divergence between the 20 and 30-day moving averages suggests a deterioration in market sentiment.
On the hourly chart, a short-lived rebound has struggled to stay above 0.6780. And that is a sign that the bears are still in control of the direction.
0.6700 is the next support. Its breach would extend the sell-off to November 2020’s lows near 0.6600. The RSI’s oversold situation may cause a limited rebound with 0.6810 as the closest resistance.
US 30 breaks higher
The Dow Jones recoups losses as the omicron variant may have less impact than feared. The index bounced off last October’s lows around 34000.
An oversold RSI in this demand zone has attracted a crowd to buy the dips. A break above 34950 and then 35300 would prompt short-term sellers to cover, paving the way for a sustainable rally.
35950 would be a key hurdle and its breach may turn the cautious mood around and resume the bullish trend. 34700 is the first support when the bulls try to catch their breath.
Article by Orbex
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