Intraday Market Analysis – AUD Struggles to Bounce.

AUDUSD tests key support

The Australian dollar softens as the state of Victoria goes into a five-day lockdown.

Last week’s bearish breakout below 0.7450 has given the bears the upper hand. The price’s failure to lift offers around 0.7500 further confirms the downward bias. The current consolidation is likely an accumulation phase for the sell-side.

Buyers are struggling to hold above the critical support at 0.7410. A drop could invalidate the timid rebound and trigger a new round of sell-off towards 0.7300.

EURGBP capped by resistance

The Pound rallied after average earnings jumped in the past three months. The euro’s latest rebound was capped by 0.8565, where strong selling interest pushed it back to the base.

From the daily chart’s perspective, the pair moves south in a falling channel in spite of a choppy path. A break below the floor at 0.8510 could send the price towards 0.8480, key support from April’s rally.

On the upside, even if buyers succeed in clearing 0.8565, 0.8595 could be a tough resistance to crack in the short term.

US 30 rally seems overstretched

The Dow Jones consolidates as Fed Chairman Jerome Powell stressed again on the temporary nature of inflation. The rally has halted at May’s high at 35090.

The RSI divergence shows a loss in the upward momentum, suggesting that buyers were eager to take profit. A shooting star at the latest high is another indication of a lack of commitment from the buy-side, which may foreshadow a correction.

34660 is the key support and its breach would prompt short-term buyers to bail out, confirming the U-turn in the process.

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