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GBPUSD finds bids

The US dollar softened after Treasury Secretary Yellen said inflation was not entrenched. After receding from the previous high at 1.1500, the pound found support at the base (1.1100) of the current rebound. This is a sign of solid interest in keeping Sterling afloat. An oversold RSI has attracted some bargain hunters. A break above 1.1500 would cause a short squeeze and raise short-term volatility. Then September’s high and a major daily resistance at 1.1710 could be in sight. A fall below 1.1100 may resume the downtrend.

EURJPY seeks support

The yen surged after Japan intervened for the second time in a month. A fall below 146.70 forced some buyers to bail out but has barely dented the bullish bias. The overall rally had accelerated after it broke above September’s high at 145.00. A bullish MA cross on the daily chart is a sign of increasing momentum and buyers would rather see the pullback as an opportunity. 143.50 next to the 20-day moving average is a fresh support, and a close above 148.30 would carry the pair to December 2014’s high at 149.70.

GER 40 bounces higher

The Dax 40 bounces back as traders take profits ahead of another rate hike by the ECB. Sentiment has improved a bit after the bulls managed to push past 12670, prompting the opposite side to cover. The current phase of recovery will see whether there is enough follow-up interest in a sustained reversal. 12550 at the base of the breakout is a key support. A close above 12930 could pave the way for a rally back to 13200 then September’s high at 13500. A bearish breakout, however, would send the index back to 12320.

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