23 Feb

Intraday Market Analysis – The Euro Bounces Back

February 23, 2022

By Orbex

EURUSD bounces off support

EURUSD

The euro surged over signs that Moscow may remain open to diplomacy.

The pair found support at the base of the previous rally (1.1290), indicating the bulls’ commitment to keeping the rebound intact. The RSI’s oversold situation attracted a slew of bargain hunters betting on a lengthy rebound.

A break above 1.1390 would prompt sellers to cover and pave the way for a sustained recovery. The recent peak and daily resistance at 1.1490 is a major hurdle. Its breach could extend the rally to 1.1600.

EURGBP attempts reversal

EURGBP

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The sterling whipsawed after BOE officials’ comment about a “modest” rate hike over the coming months. The euro saw strong bids at the base of the February breakout rally (0.8310).

A break above 0.8370 wiped out some selling interest, a prerequisite for a meaningful recovery. 0.8400 is the next resistance and its breach would further boost buyers’ confidence and propel the single currency to the recent high at 0.8475.

On the downside, a bearish breakout would invalidate the rebound pattern and cause a sell-off below 0.8280.

GER 40 breaks floor

DAX 40

Trepid sentiment continues to weigh on the Dax. The plunge below the 9-month long consolidation area (14850) may foreshadow a bear market.

As traders grew wary, trapped bulls would look to get out of their positions while the bears saw any rebound as an opportunity to sell into strength. An oversold RSI brought in some bids and 14850 is the immediate resistance.

However, the index would remain under unless it lifts offers around 15200. Otherwise, the psychological level of 14000 would be the next stop.

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