Intraday Market Analysis – GBP Consolidated Gains

GBPUSD to test major ceiling

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The pound holds onto its gains after the October PPI was revised. As the pair approaches the August high of 1.2270, a bearish RSI divergence is a warning sign that the rally may be running out of juice. Profit-taking could be expected in this major supply area while those who hold a bearish view in the medium term may look to sell. However, a bullish breakout could pave the way for a reversal. 1.2020 is the first support should Sterling start to drift lower and 1.1900 another level to gauge followers’ interest.

EURCHF awaits breakout

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The euro softened after ECB officials played down wage pressure. Following a break above September’s high of 0.9830, the euro has found robust support over 0.9720. Then higher lows show rising interest in keeping the pair afloat. 0.9890 is a major resistance to clear before the rebound could break free. A rally above the recent peak of 0.9950 would put the single currency on a bullish trajectory in the weeks to come. On the downside, 0.9760 is the support to monitor if hesitation leads to a prolonged sideways action.

GER 40 hits critical resistance

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The Dax 40 steadies over the upbeat German Q3 GDP. The RSI’s overbought condition is a sign of overextension. As the index tests June’s high of 14700, short-term traders may look to trim their exposure. 14370 is the first support and its breach might give buyers an excuse to bail out. Then 14150 at the confluence of a recent daily low and the 20-day moving average would be a key level to prevent broader liquidation. On the upside, a break above the ceiling could lay the groundwork for a bullish reversal in the medium term.

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