INTRADAY TECHNICAL ANALYSIS 14 JANUARY (observation as of 07:15 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.15054 and 1.15542.

-        Support line of 1.14078 and 1.13590.

Commentary/ Reason:

  1. The euro was steady at $1.14782, up 0.20% on the day, hovering near its more than two-month high of $1.14825 touched earlier today, and on the move to end the week with around 0.8% gains.

  2. EUR/USD rallied on signs of strength within the Eurozone economy. Italy Nov industrial production rose +1.9% m/m, the largest increase in 13 months.

  3. While the dollar struggling after a lower T-note yields Wednesday pressured the dollar following the U.S. December consumer prices figures.

  4. Also, upbeat comments from ECB Vice President Guindos on Thursday boosted EUR/USD when he said economic activity is in line with ECB projections and the Omicron variant is unlikely to derail the 2022 Eurozone recovery.

  5. Bulls have finally made a forward-push in EUR/USD. After spending around two months chopping back-and-forth in a tighter and tighter range, bullish potential began to show more recently with a formation showing inside of the sloppy chop. A continuation of the surge would have to pass the 1.150 level, before aiming at the next resistance at 1.155.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.91530 and 0.91764.

-        Support line of 0.90773 and 0.90540.

Commentary/ Reason:

  1. The dollar held around yesterday's 2-week low decline and last traded at 0.91026 franc on Friday.

  2. The USD/CHF slumps for the third consecutive day, breaks below the 0.9100 thresholds and headed for 0.80% weekly losses.

  3. The slide in the pair was a courtesy of broad U.S. dollar weakness across the FX board, as the greenback is getting hit by all G8 currencies.

  4. The Swiss franc gained ground, supported by a pullback in Treasury yields amid eased concerns of accelerated monetary policy tightening by the Federal Reserve after December’s US inflation rate was in line with expectations.

  5. The USD/CHF plummeted, as a sharp rise in selling activity in the last two trading sessions reversed the most recent rally attempt. Given the steady RSI and a lack of decisive momentum signals from MACD, the USD/CHF prices are likely to remain pressured until the immediate hurdle.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 114.993 and 115.724

-        Support line of 113.531 and 112.800.

Commentary/ Reason:                                        

  1. The Japanese yen extended recent gains, trading at 113.779, near its strongest level against the greenback in more than 3-weeks.

  2. The USD/JPY is now en route for more than 1% weekly loss for the week, the first after several weeks.

  3. While Fed's hawkish shift has tended to benefit the U.S. dollar, it was losing ground against the Japanese yen, as the yen found a bid amid the risk-off mood. A much of decline in Japan’s Nikkei Stock Index today and yesterday boosted the safe-haven demand for the yen.

  4. The USD/JPY pair continues to march towards the previous consolidation channel, and toward a 112.80 support line as price action has reversed since touching the recent ceiling.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.37710 and 1.38220.

-        Support line of 1.36690 and 1.36180.

Commentary/ Reason:

  1. Sterling on Friday stood at $1.37204, up 0.15% on the day and hold on to the 1-month high of $1.37484 touched yesterday.

  2. The pound is up more than 4% from December lows, supported by expectations that the Bank of England will be raising interest rates as early as next month to tame inflation.

  3. While the U.S. CPI data pointed to the highest inflation rate in 39 years, putting the Fed under pressure to start raising interest rates.

  4. Sterling also had been rallying as traders reckon Britain's economy can survive a surge in Omicron COVID-19 cases.

  5. Investors continue to monitor signs of a slowing economic recovery, mounting inflationary pressure, record rises in COVID-19 cases and post-Brexit tensions over the Northern Ireland protocol.

  6. The GBP/USD rally is beginning to lose steam, as small-bodied candles suggest a slowdown and selling pressure rose in yesterday’s trading session. The pair has returned to a previous trading range between the 1.361 and 1.382 price levels and may be contained within this range in the near-term.

GBPUSD