[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.17997 and 1.18637.
- Support line of 1.16717 and 1.16077.
Commentary/ Reason:
The greenback marked a fresh 5-month high against the euro.
The euro traded at $1.17057, its third day of consecutive decline against the greenback.
Dollar strength undercut the euro along with dovish ECB comments after ECB Governing Council member Vasiliauskas on Tuesday that said that even after inflation is back to its pre-pandemic trajectory, the ECB will need to keep quantitative easing in place for "quite a while."
Another bearish factor for EUR/USD is concern about a resurgence in covid-19 infections in Europe after Germany reported that its 7-day average of new German COVID-19 infections rose to a 2-1/4 month high on Monday.
The rally in European shares and signs of a pick-up in inflation in big euro zone economies weighed on eurozone bonds, pushing 10-year yields up 4 to 5 basis points across the board.
Investors are now watching the course of the U.S. growth rebound and its possible impact on inflation, amid concerns that a renewed rise in bond yields could hit stocks as they approach fresh record highs.
President Joe Biden is poised to unveil a large infrastructure package later today, and key jobs data are due Friday. The IMF will upgrade its forecast for global economic growth next week.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.94690 and 0.95247.
- Support line of 0.93576 and 0.93019.
Commentary/ Reason:
The Swiss franc extended its decline to trade lower against the U.S. dollar today, weighed down by a strengthening greenback and higher U.S. Treasury yields, which make the currency more attractive as an investment.
The greenback traded at 0.94392 Swiss franc, rose 0.21%, on top of 0.33% overnight.
U.S. President Joe Biden is expected to put some detail in his infrastructure spending plans later today.
Demand for the safe-haven greenback also is favoured due to persistent concerns over a resurgence of COVID-19 and global lockdowns.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.37929 and 1.38227.
- Support line of 1.36965 and 1.36667.
Commentary/ Reason:
The sterling declined against the dollar, slipped 0.12% to trade at $1.37226.
A jump in T-note yields boosted the dollar Wednesday, along with strong U.S. economic data overnight. The 10-year T-note yield rose to a new 14-month high of 1.774%.
Besides pandemic infection and inoculation counts, investors are now looking to PMI figures for both countries due midweek and for some details of U.S. President Joe Biden’s infrastructure spending plan.
