INTRADAY TECHNICAL ANALYSIS 30 SEPTEMBER (observation as of 05:45 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.16899 and 1.17293.
- Support line of 1.15623 and 1.15229.
Commentary/ Reason:
The euro rose slightly at $1.16049 on Thursday, though still lingered near Wednesday's 14-month low of $1.15892.
The safe-haven greenback saw a bid on worries the Fed could start to tighten into a period of slowing global growth and persistently high inflation, and perversely did well amid an impasse in Washington over the U.S. debt ceiling that threatens to plunge the government into a shutdown.
The recent surge in T-note yields is still supporting the dollar, along with central bank divergence, with the Fed expected to taper QE well before the ECB, BOE, or BOJ.
The EUR/USD was trading in a narrow range. Intraday bias is back on the downside for 1.1562 key support level next. On the upside, break of around 1.1689 resistance is needed to indicate short term bottoming.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.93741 and 0.94052.
- Support line of 0.92738 and 0.92428.
Commentary/ Reason:
The dollar traded slightly easier against the Swiss franc today, at 0.93335. The pair continue to confide in a narrow trade band following a five straight day of gains.
The buying pressure in the greenback keeps the pair supported, on Fed’s tapering expectations, growth concerns, and surging U.S. bond yields.
As for now, traders are bracing for the Swiss KOF Leading Indicators, U.S. GDP, Initial Jobless Claims, and Chicago PMI data to gauge the market sentiment.
Fresh upside may attempt another break of the resistance line of early March’s swing high around 0.9374, and following that, the 0.940 round figure may entertain. On the downside, the pair is likely to extend the pullback to the July’s high near 0.9273 threshold.
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 112.262 and 112.598.
- Support line of 111.176 and 110.840.
Commentary/ Reason:
The dollar bought 111.917 yen, easing slightly after reaching 112.046 overnight, a level not seen since February 2020.
Modest gains in Japan where the ruling party’s new leader who is set to become the next prime minister is seen by investors as maintaining stability.
Meanwhile, the jump in the U.S. yields keep pressure the yen, as higher rates can draw flows from Japan. The yen also weighted after the BoJ Governor Kuroda on Wednesday said “it’s necessary” for the BoJ to continue with persistently large-scale easing to achieve its 2% inflation target.
The USD/JPY pair has surged towards the 112.262 price level, as bullish sentiment has grown considerably resulting in buyers dominating the last five trading sessions. Sellers appear to have returned in the early Asian trading session and it remains to be seen whether this is the start of a price reversal.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.35536 and 1.36090.
- Support line of 1.33744 and 1.33190.
Commentary/ Reason:
Sterling edged up 0.14% to $1.34446 but remained near the nine-month low of $1.34117 reached overnight on concerns about soaring natural gas prices and almost a week of petrol shortages in Britain.
The pound recovered slightly, after UK PM Boris Johnson has instructed the army to prepare for delivering gasoline to petrol stations as a shortage of lorry drivers already caused dry ups in several places.
A lingering Brexit-related issue between France and the UK, clashing over fish, also adding pressure on the pound.
The dollar, meanwhile, is gaining ground across the board, benefiting from higher U.S. bond yields. The Fed’s taper signal continues having implications on markets. Concerns about the U.S. debt ceiling and China's power outages are also weighing on sentiment.
The next level to watch is 1.3374, after the pair crosses the 1.3440 mark, the month's low. It is then followed by 1.3319. Some resistance awaits at 1.3553, then 1.360.
