By Orbex
EURUSD hits resistance
The euro fell back after ECB President Lagarde tried to cool rate hike expectations. The rally came under pressure at the January peak of 1.1480.
The RSI’s overextension at this daily resistance prompted momentum buyers to cash in. A combination of profit-taking and fresh selling may drive the exchange rate lower.
Short-term sentiment remains upbeat though unless the single currency drops below the origin of its bullish push at 1.1270. A recovery above 1.1480 could pave the way to last October’s high at 1.1690.
GBPUSD consolidates gains
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The sterling turns higher as traders price in an increasingly hawkish Bank of England. A break above 1.3520 forced sellers to cover some of their positions.
However, the pound’s rally came to a halt in the supply zone around 1.3620. The RSI’s overbought situation and bearish divergence suggest softness in the underlying momentum.
The pair found bids on the 50% Fibonacci retracement level (1.3490), which sits in the aforementioned supply area. A new rally may propel the pair to the daily resistance at 1.3750.
US 30 bounces higher
The Dow Jones 30 inches higher supported by better-than-expected earnings. The index steadied after successive breaks above 34800 and 35450.
Nonetheless, the recent recovery slowed down on the 30-day moving average, a sign of a lingering cautious mood. 34500 is a key support to keep the rebound relevant.
A bearish breakout could extend the correction to 33800. On the upside, a rally above 35700 could attract momentum traders and initiate a bullish reversal to 36500.
Article by Orbex
Orbex is a fully licensed broker that was established in 2011. Founded with a mission to serve its traders responsibly and provides traders with access to the world’s largest and most liquid financial markets. www.orbex.com
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