INTRADAY TECHNICAL ANALYSIS 18 AUGUST (observation as of 05:10 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.17837 and 1.18162.
- Support line of 1.16786 and 1.16462.
Commentary/ Reason:
The euro touched $1.17015 early in the Asia session, its 9-month low, before recovering slightly to $1.1716.
The dollar strengthened as investors have cut exposure to riskier currencies, mostly on virus concerns. A slide in stocks also boosted liquidity demand for the dollar.
The release of Eurozone GDP data was unimpressive and does little to move the pair. The eurozone economy grew 2% in the Q2, the EU statistics office said on Tuesday, confirming its earlier reading as the easing of coronavirus restrictions spurred economic activity after a brief recession.
Later today, traders will be looking to minutes from the Federal Reserve's July meeting. The minutes will provide more colour about the deliberations about quantitative easing.
The EUR/USD has moved to test the 1.167 support level, before rebounding from the descending trendline. Each attempt at a rally has become gradually weaker as a bearish bias begins to dominate the pair. The EUR/USD pair is at risk of falling further as the dismal market’s mood persists.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.91726 and 0.91971.
- Support line of 0.90935 and 0.90691.
Commentary/ Reason:
The dollar rebounded off its 1-week low recorded yesterday, to trade 0.10% higher at 0.91436 franc.
The dollar remains on the front foot, as Switzerland recorded its biggest jump in infections in months.
The pair will next react to the latest Federal Reserve minutes for more colour about the deliberations about quantitative easing.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.38409 and 1.38860.
- Support line of 1.38409 and 1.38860.
Commentary/ Reason:
The risk-averse mood that had knocked sterling to a 3-week low on the dollar earlier and held the British currency at $1.37418.
The dollar is being supported by the nervous risk environment. The pair fell on concern the pandemic is worsening in Europe after the UK Telegraph reported that UK hospitalizations from COVID-19 rose to their highest level since March.
The headline of the UK jobs report on Tuesday held the pound from sliding further, as the numbers looking broadly positive for the country. The UK labour market looks in a very strong position as the furlough scheme continues to be phased out. The data yesterday was very encouraging, from the drop in the headline unemployment rate to the payrolls.
