Intraday Analysis – JPY still under pressure – Orbex Forex Trading Blog

USDJPY attempts to rebound

The Japanese yen recoups some losses over an uptick in June’s CPI reading. Sentiment has turned cautious after the greenback fell below the daily support of 138.50. A bullish RSI divergence showed a slowdown in the sell-off momentum but most buyers would need more reassurance about the sustainability of the current bounce. Short-covering mostly likely lifted the pair to the psychological level of 140.00. 138.80 is a fresh support and 140.80 a key resistance to clear before the rebound would gain traction.

EURAUD seeks support

The Australian dollar surged as a jobless rate at 50-year lows could risk more rate hikes by the RBA. On the daily chart, the bias is still in favour of the euro after it broke above 1.6500. Though a drop below 1.6460 has forced leveraged buyers to bail out, the current consolidation would be valid as long as it stays above 1.6230. The RSI’s oversold condition may attract some bargain hunters as the price tests this demand zone. The first hurdle at 1.6490 then the peak at 1.6600 are the levels to lift before the pair could recover.

UK 100 breaks daily resistance

The FTSE rallies as China’s stimulus boosts mining stocks. After flirting with the March lows of 7240, a jump above the daily resistance of 7560 confirms that the bulls have made their way back. The latest volatility is a combination of short-covering and momentum buying and could open the door to a sustained bounce in the medium-term. June’s high of 7680 is the next level to see if the bullish impetus is intact and its break would trigger a broader short squeeze. 7550 is the closest support if the rally needs some breathing room.

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