INTRADAY TECHNICAL ANALYSIS 7 OCTOBER (observation as of 05:30 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.16036 and 1.16307.

-        Support line of 1.15159 and 1.14887.

Commentary/ Reason:

  1. The euro was steady at $1.15565 per dollar on Thursday after slumped to $1.15294 overnight for the first time since July of last year.

  2. The safe-haven dollar held close to a 14-month high against the euro as a surge in energy prices fuelled worries that inflation could crimp economic growth while also prodding the Federal Reserve to act sooner to normalise policy.

  3. Improved prospects in political negotiations over the U.S. debt ceiling also supported gains for the dollar. The dollar also stabilized, backed by rising bond yields. The 10-year Treasuries stabilized around 1.50%.

  4. While in Europe, eurozone yields also rose as a government bond sell-off extended on inflation concerns and potential monetary policy tightening. A gauge of German inflation expectations hit its highest since May 2013. Germany's 10-year government bond yield, the benchmark of the eurozone, rose as much as 4 basis points and hit its highest since the end of June at -0.147%.

  5. The EUR/USD has resumed its decline. The next level to watch is the round 1.1515 line, followed by the 1.1488 support line.

  6. On the upside, some resistance awaits at 1.160, which capped the pair on Tuesday, and then at the 1.1630.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.93112 and 0.93293.

-        Support line of 0.92526 and 0.92345.

Commentary/ Reason:

  1. The dollar was flat against the Swiss franc on Thursday, at 0.92747, inching away from the 1-week low recorded on Monday.

  2. While the renewed China’s Evergrande fears, inflation concerns, and the U.S.-China political tension favours safe-haven Swiss franc, the greenback found firmer buying support amid heightened nerves about the global growth outlook and as traders awaited U.S. jobs data for a clue on the timing of Fed policy tightening.

  3. The USD/CHF has rebounded from the 0.9222 support line as bullish dominance is confirmed, once again. The pair keeps its stability above it, accompanied by stochastic reach to the oversold areas, to form positive motive that we are waiting to assist to push the price to resume the positive trades, waiting to visit 0.9311 level mainly. The resistance line remains in sight and has been an obstacle to the rally in recent trading.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 111.837 and 112.073.

-        Support line of 111.073 and 110.837.

Commentary/ Reason:                                        

  1. The Japanese yen traded at 111.423 per dollar on Thursday, mostly flat near the middle of its range of the past week and a half.

  2. A rally in stocks on Thursday were slightly reducing the liquidity demand for the dollar. It also losing momentum as the benchmark U.S. 10-year Treasury yield were little changed. The yield recently crossed 1.5% and has largely sustained above that level.

  3. The yen garnered support on comments from BoJ Governor Kuroda on Wednesday, who said Japanese firms face fewer supply-side constraints than the U.S., and Japan’s CPI is not as weak as headline figures suggest.

  4. Intraday bias in USD/JPY remains neutral. The pair has stalled below the 111.83 resistance line. Another retreat however cannot be ruled out, but downside should be contained at the 111.37 and the 110.83 supports.

  5. Traders are positioning themselves ahead of Friday’s U.S. Non-Farm Payrolls report that could offer clues on the timing of a tapering of Federal Reserve stimulus and the start of interest rate hike.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.36430 and 1.36770.

-        Support line of 1.35330 and 1.34990.

Commentary/ Reason:

  1. Sterling was unchanged on Thursday, traded at $1.35788 per dollar.  Sterling recovered some of last week's sharp selloff, though the gains were capped through the Asia session.

  2. Fuel shortage problems and renewed Brexit concerns continue to weigh on the pound while the pair remains undermined by the broad-based U.S. dollar strength.

  3. The safe-haven dollar benefits from the risk-off mood, courtesy of the advance in the Treasury yields on rising energy costs and Fed’s tapering expectations.

  4. The focus now remains on the U.S. ADP jobs data tomorrow for fresh dollar trades, as the UK economic data releases remains relatively scarce.

  5. The GBP/USD pair bounced from the 1.353 resistance line which represents a previous support level for the pair. And pullback moves further may targeting the 1.3499 support figure.

  6. Alternatively, should the quote rise, level near 1.364, can test the GBP/USD buyers. Followed at the horizontal hurdle surrounding 1.367.

GBPUSD