INTRADAY TECHNICAL ANALYSIS 16 AUGUST (observation as of 06:50 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.18061 and 1.18176.
- Support line of 1.17831 and 1.17716.
Commentary/ Reason:
The euro was mostly flat against the dollar on Monday, at $1.17866, still hovering around the 1-week high of $1.18042 reached Friday.
The pair rallied moderately on dollar weakness and a strong Eurozone inflation report that was hawkish for ECB policy. Next, the dollar could rally this week if minutes of the Federal Reserve's last policy meeting confirm a hawkish shift on tapering. The minutes are out on Wednesday while Fed chair Jerome Powell is speaking on Tuesday.
The EUR/USD has moved to test the descending trendline which remains intact as a key resistance level for the pair. A support level exists at the 1.178 price line where the previous sell-off was contained. Momentum indicators have stalled in bearish territory.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.91694 and 0.91879.
- Support line of 0.91324 and 0.91139.
Commentary/ Reason:
The dollar is trying to rebound against the Swiss franc on Monday after slumping to a new 1-week low earlier today.
It rose 0.1% and last stood at 0.91599.
The USD/CHF pair has been against a strong resistance zone with multiple top formations. USD/CHF went to the August 4 low, before made a swift recovery, only to retrace toward the 0.813 support level.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.39145 and 1.39550.
- Support line of 1.37835 and 1.37430.
Commentary/ Reason:
Sterling was on the defensive at $1.38431 on Monday.
The pair was finding a firmer footing above the recently tested 1.38 support level on entry into a busy week that could see the pound resilience tested again by the greenback as the Fed edges closer toward a tapering of its quantitative easing programme.
Sterling was the underperformer among major currencies for the week into Monday after last quarter's GDP data neglected to give grounds for the BoE) to move further in the direction of an interest rate rise any time soon, although losses for the dollar have since helped the pound back onto its feet and given it a shot at stabilising during the week ahead.
The GBP/USD price action is currently being contained. A consolidation channel appears to be forming between the 1.390-1.380 price levels. Oscillations are likely to continue.
