INTRADAY TECHNICAL ANALYSIS 14 SEPTEMBER (observation as of 06:00 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.18283 and 1.18471.

-        Support line of 1.17676 and 1.17489.

Commentary/ Reason:

  1. The euro was flat on Tuesday, changed hands at $1.18123, having bounced back from overnight low of $1.17701, its lowest since Aug. 27.

  2. Higher T-note yields supported the dollar along with weakness in stocks, which boosted the liquidity demand for the dollar.

  3. The euro also dropped on dovish comments from ECB Executive Board member Schnabel, who said "the prospect of persistently excessive inflation, as feared by some, remains highly unlikely."  He said he supports moving toward a tapering process "sooner rather than later."

  4. Ahead of the Federal Reserve’s next policy review on Sept 21-22, investors are closely looking at U.S. consumer price data due at 1230 GMT today that could impact expectations of the likely timeline for a reduction in Federal Reserve stimulus. Earlier than expected tapering will hurt risk assets, and under such market conditions, the dollar is deemed to benefit from funds escaping risk assets.

  5. The EUR/USD has bounced back from the 1.176 support level as buying pressure rose in yesterday’s trading. Currently, however, bearish conviction remains weak and despite the longer-term trajectory, price action is yet to break the 1.176 support level. If 1.176 fails as support, then the next major support at 1.174.

  6. Overtaking 1.182 will signal the return of buyers. If this move creates enough upside momentum, then look for the buying to possibly extend into 1.184.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.92533 and 0.92782.

-        Support line of 0.91730 and 0.91482.

Commentary/ Reason:

  1. The dollar rose slightly against the safe haven Swiss franc, at 0.92186 franc.

  2. While the world’s stock markets rebounded on Monday after a fall last week, supporting risk sentiment, some analysts also warn of growing headwinds to risk sentiment.

  3. The U.S. inflation data could bring fresh opportunities later today. The CPI is expected to increase by 0.4% in August versus a 0.5% growth in July, while the Core CPI may register a 0.3% growth in August, should be the same as in July.  

  4. Switzerland’s PPI meanwhile also will be published today and is expected to rise by 0.2% compared to 0.5% in the previous reporting period.

  5. The valid breakout through 0.9253 and 0.9278 will activate a strong upwards movement. The USD/CHF pair is under bullish pressure after coming back above the yesterday’s range resistance.

  6. On the downside traders will be eyeing the 0.9173 to 0.9148 for support.

USDCHF

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.38619 and 1.38833.

-        Support line of 1.37927 and 1.37713.

Commentary/ Reason:

  1. Sterling was flat at $1.38397.

  2. The pound retreated from the highs as inflation concerns send the dollar higher. Worries about UK tax hikes, rising COVID-19 cases and other factors are also weighing on cable.

  3. The greenback meanwhile gaining ground as pullback in U.S. yields and weakness in stock market dampened risk sentiment.

  4. The GBP/USD has been rejected at the 1.386 line once again. It has happened several times since early August, showing the line's strength. Beyond that, the next line to watch is 1.3883,

  5. Looking down, support awaits at the yesterday’s low of 1.379, followed by 1.3775.

GBPUSD