INTRADAY TECHNICAL ANALYSIS 22 DECEMBER (observation as of 05:45 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.13267 and 1.13705.
- Support line of 1.12391 and 1.11953.
Commentary/ Reason:
The euro was last at $1.12724 on Wednesday, retreated marginally after two successive sessions of gains.
Strength in T-note yields today lend support in the dollar, though rally in stocks reduced the liquidity demand for the dollar.
The euro meanwhile was weighed after the Eurozone consumer confidence indicator fell -1.5 to a 9-month low of -8.3. Also, German Jan GfK consumer confidence fell -5.0 to a 7-month low of -6.8, weaker than expectations of -2.7. Strength in German bund yields after the 10-year bund yield rose to a 3-week high of -0.299% however limited losses in the euro.
Concerns about surging global Omicron cases in Europe and the U.S. also clouded the global economic recovery, weighed on euro.
No change in EUR/USD’s outlook as range trading continues. Intraday bias remains neutral and further decline will remain in favour as long as the resistance holds. Break of 1.119 will resume larger decline from 1.239.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.92571 and 0.92811.
- Support line of 0.91795 and 0.91555.
Commentary/ Reason:
The greenback rose 0.13% against the Swiss franc, to trade at 0.92427 franc on Wednesday.
The pair jumped as U.S. Treasury yields recovered some ground, but it faces resistance at the 50-hour SMA at 0.9215.
Risk-aversion in the financial market, spurred by the Omicron outbreak and U.S. domestic political issues, however, allowed the Swiss franc to hold on to its safe-haven status, halting on the greenback.
The USD/CHF daily chart depicts that the pair have remained in consolidation for more than 2-weeks, in the 0.917-0.925 range, sometimes piercing through price extremes, like the December 15 high at 0.9293. At press time, outlook in USD/CHF is unchanged and intraday bias stays neutral first.
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 114.344 and 114.611.
- Support line of 113.477 and 113.209.
Commentary/ Reason:
The yen, considered a safe-haven asset, was flat versus the greenback at 114.131 per dollar, but hovering just around a 3-week low touched last Friday.
A higher T-note yields supporting the bounce in the USD/JPY pair on Wednesday after the 10-year T-note yield climbed to a 1-week high of 1.496%. USD/JPY also moved higher on reduced safe-haven demand for the yen after Japan’s Nikkei Stock Index traded higher today.
Volatility could be lower heading into the Christmas Holidays as many traders are already off their desks and done for the year. Thus, liquidity is more inferior across the markets.
The Japanese yen hold its safe haven status, but still trading near the middle of the trading range of the past three weeks.
The support of the consolidation area is at 113.47, and as long as the greenback trades above it, the short-term outlook appears bullish. In case of a bearish breakdown, stop losses will be hit, likely dragging the pair toward 113.20.
Divergent monetary policies continued to influence the currency’s movement, on hawkish Fed against the BoJ ultra-loose policy.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.32913 and 1.33203.
- Support line of 1.31974 and 1.31683.
Commentary/ Reason:
The pound managed to recover some grounds after slumped down on Monday.
The pound now marginally moved at $1.32498.
Sterling was higher after UK PM Boris Johnson on Tuesday ruled out any tougher lockdown measures ahead of Christmas. Also, Health Secretary Sajid Javid mentioned a reduction in the virus-linked self-isolation period to seven days from previously 10.
Omicron updates, Brexit news and UK Q3 GDP can entertain traders ahead of US data later today. Among the key US data are the final Q3 GDP and the CB Consumer Confidence for December. Support from BoE interest rate decision last week proved to be short-lived.
