INTRADAY TECHNICAL ANALYSIS 21 SEPTEMBER (observation as of 05:35 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.17513 and 1.17628.

-        Support line of 1.17055 and 1.16940.

Commentary/ Reason:

  1. The euro was mostly flat, at $1.17126 on Tuesday, after having touched a 1-one-month low of $1.16999 overnight.

  2. Dollar strength is undercutting the euro along with dovish comments from ECB Executive Board member Schnabel overnight who said the ECB "is still more concerned about inflation being too low rather than too high.

  3. Although the gains in the dollar were limited by subdued T-note yields, as investors looked to the U.S. Federal Reserve's two-day policy meeting starting later today.

  4. The EUR/USD holds onto the previous day’s defensive performance, seesawed around the middle.

  5. It stalled at the 1.169 support level, and it appears that buying pressure will continue as the pair start to move away from the support level. Conviction currently remains low, and the next test will be the 1.174 resistance line.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.93339 and 0.93599.

-        Support line of 0.92496 and 0.92235.

Commentary/ Reason:

  1. The dollar moves lower against the safe-haven Swiss franc, pulled down off a three-month high Monday.

  2. The dollar traded at 0.92747 to the franc on Tuesday.

  3. The Swiss franc holds some ground on its safe-haven appeal amid risk aversion on the rapid spread of the Delta variant of the coronavirus and China’s Evergrande liquidity risk.

  4. However, the dollar also is still holding its value as traders awaited guidance from the U.S. Federal Reserve regarding the bond-buying programme. The FOMC’s 2-day policy meeting is due to be held on Sept. 21-22 and could provide clues as to when the U.S. central bank will start withdrawing its asset purchases. Reduced central bank stimulus tends to lift bond yields, which also helps boost the dollar.

  5. The USD/CHF pair declined clearly yesterday to retest 0.9249 that turns into key support after breaching it previously, accompanied by witnessing clear oversold signals through stochastic, waiting to motivate the price to resume the positive trades that target visiting 0.9333.

USDCHF

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.37332 and 1.37680.

-        Support line of 1.36208 and 1.35860.

Commentary/ Reason:

  1. Sterling rose around 0.2%, to trade at $1.36711 after sliding to a nearly 1-month low of $1.36408 overnight.

  2. The pound opened higher against the U.S. dollar today despite the increasing risk-off mode, which has become prevalent ahead of the U.S. Fed’s meeting that begins today. The possibility of the tapering of asset purchases by the U.S. Fed this week may also raise the appeal of the greenback and hence was likely to weaken the ringgit.

  3. The Bank of England meanwhile will announce a policy decision on Thursday. The BoE is expected to leave policy settings unchanged, but traders see potential for gains in the currency if the bank adopts a hawkish tone or more members being calling for asset purchase tapering.

  4. The GBP/USD pair has stalled just before another test of the 1.362 support line, indicating that sellers lack the conviction to drive a break out of the current trading range. Momentum indicators are bearish with MACD breaking the zero line.

GBPUSD