EUR/USD sees limited pullback
The euro retreated after the ECB’s chief economist tempered expectations of more hikes after the summer. The pair is grinding the support-turned-resistance of 1.0960 from the start of the mid-May sell-off. The RSI’s repeatedly overbought condition may temper the bullish drive and prompt buyers to take some chips off the table. Mean reversion would send the euro to 1.0860 over the rising trend line where follow-up interest could be expected. A successful bounce and a close above 1.0960 would expose this year’s peak of 1.1090.
NZD/USD tests key supply area
The New Zealand dollar slips over a cautious mood amid thin liquidity early this week. The price is at a crossroads as it grinds the supply zone 0.6250-0.6300. A bearish RSI divergence shows a loss of momentum as the bulls take profit. Still, a series of higher lows is a sign of a strong bullish pressure building up over the past two weeks and a decisive break above 0.6250 would force the remaining sellers out and open the door to the major daily resistance of 0.6380. 0.6160 is the closest support to assess buyers’ commitment.
Dow Jones 30 probes support
The Dow Jones 30 steadies as the market remains hopeful of a Fed pivot. A close above the daily resistance of 34300 after a botched attempt has helped the bulls regain control of the direction, with a bullish MA cross on the daily chart supporting the recovery in market sentiment. A close above 34500 would bring the index to the new supply area between last December’s spike at 34900 and the psychological level of 35000. The recent dip at 33850 is the first support and 33500 on the 20-day SMA the bulls’ second layer of defence.
