INTRADAY TECHNICAL ANALYSIS 22 JULY (observation as of 05:40 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.18161 and 1.18371.
- Support line of 1.17481 and 1.17271.
Commentary/ Reason:
The euro stood at $1.17966, rising off Wednesday's 3-1/2-month low of $1.17518 ahead of a closely watched ECB policy decision later in the global day.
A dovish tone is expected after President Christine Lagarde foreshadowed a guidance tweak during an interview last week. No change in the ECB bias is unlikely to be enough to send the euro higher, while any shift towards the dovish interpretation of the strategic review would weaken the euro over the medium-term.
The EUR/USD has stalled mid-range as buying pressure begins to rise and bearish sentiment starts to wane. Neither buyers nor sellers have the appetite to dominate price action ahead of ECB’s policy decision.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.92319 and 0.92573.
- Support line of 0.91498 and 0.91245.
Commentary/ Reason:
The dollar held at 0.91748 per franc on Thursday, slightly declined.
A modest recovery in the global equity markets undermined the safe-haven Swiss franc and was seen as a key factor that extended some support to the USD/CHF pair, while the sharp rebound witnessed in Wall Street's main indexes overnight limited the dollar's upside.
With the market action turning subdued in the absence of high-tier data releases and fundamental drivers, the pair seems to have cone into a consolidation phase. The USD/CHF pair unable to hold for long time above 0.9200, to trade negatively and settles below it, and it might head for additional decline affected by stochastic negativity.
The USD/CHF pair has rejected the descending trendline in further confirmation of rising bearish sentiment. A previous price recovery attempt looks likely to give way to a downtrend and the current range of price levels will remain intact.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.37571 and 1.38083.
- Support line of 1.35915 and 1.35403.
Commentary/ Reason:
Sterling traded at $1.37155, recovering from a more than 5-month trough of $1.35718 reached on Tuesday, despite rising Delta variant cases in Britain and confusion about the lifting of restrictions in England.
USD strength is contained as Wall Street equity prices rose overnight.
Brexit tension meanwhile also back between Britain and EU after Britain on Wednesday demanded a new deal from the EU to govern post-Brexit trade with Northern Ireland.
The GBP/USD pair is climbing back towards the 1.375 and 1.380 resistance line. The 1.380 represents an area of price consolidation and therefore significant bullish conviction will be required to facilitate a break.
