US30 index tests resistance
The US30 index (Dow Jones) remains steady as investors brace for the latest CPI news and the Fed’s reaction. The rally was unobstructed after it cleared the cluster of resistance around 39000. As the index is reaching a new high at 40000, an overbought RSI and a possible bearish divergence could show a slowdown in the current momentum, which could lead to a pullback. A break past 40400 would resume the uptrend and move towards another record high.
NZDUSD tests major support
The Kiwi plummeted after an unexpected rate cut by the RBNZ. The fall is a sign of uncertainty from the previous surge, and the pair is now testing the demand zone at around 0.6000 at the base of the latest breakout rally. This is a crucial psychological area to maintain the rebound bias, or a breakout could expose the daily swing low of 0.5870. The RSI’s move back into the neutral area could trigger a buy-the-dip behaviour, but bulls will need to lift 0.6060 first to start to ease the downward pressure.
EURGBP jumps higher
The pound slipped after the latest inflation data saw a jump away from 2%. Price action is attempting to move back to the latest peak towards 0.8620, and a bullish divergence on the RSI could attract some buying interest. The resistance-turned-support at 0.8600 is the next level to see if the buy side manages to regain control. Otherwise, a deeper retracement could send the pair to 0.8450.