INTRADAY TECHNICAL ANALYSIS 9 FEBRUARY (observation as of 06:40 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.14990 and 1.15699.

-        Support line of 1.12697 and 1.11989.

Commentary/ Reason:

  1. The euro was about flat at $1.14241, following its gradual retreat from a peak of $1.14836 on Friday, which matched the highest level in almost three months.

  2. The euro weakened for a second straight day, as the ECB tried to cool interest rate hike expectations. The ECB's Lagarde said on Monday there was no need for extensive tightening.

  3. A more hawkish tone from both the ECB and the Fed last week caught markets off guard and sent yields soaring on eurozone and U.S. debt in anticipation rates could rise faster and higher than previously expected.

  4. Losses in EUR/USD, however, were limited on signs of economic strength in the Eurozone after Italy Dec retail sales unexpectedly rose 0.9%, the biggest increase in 6 months.  Also, higher German bund yields support EUR/USD after the 10-year German bund yield rose to a 3-year high Tuesday.  

  5. The EUR/USD is beginning to turn back towards the descending trendline as buyers lose steam mid-rally. Price action has stalled however, as neither buyers nor sellers appear to have the conviction to drive a trend. The pair seems likely to float in the current range.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.92882 and 0.93322.

-        Support line of 0.92002 and 0.91562.

Commentary/ Reason:

  1. The dollar was marginally moved against the Swiss franc on Wednesday, traded at 0.92466 franc.

  2. The greenback held its gains on firmer buying support, backed by better U.S. economic and employment data.

  3. While the demand for safe haven Swiss franc remains, amid geopolitical tensions between of Ukraine-Russia.

  4. While the pair staying inside a one-week-old trading area, rebound eyes the stated range’s upper line, around 0.928. Beyond that, a run-up towards the last month’s peak around 0.933 can’t be ruled out.

  5. Alternatively, respectively near 0.920 and 0.9156, will challenge the USD/CHF pair.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 115.820 and 116.069.

-        Support line of 115.013 and 114.763.

Commentary/ Reason:                                        

  1. The dollar was at 115.506 yen, hovering just below a one-month high, boosted by a climb in Treasury yields to multi-year peaks overnight as traders wait on U.S. inflation data this week for clues on the pace of Federal Reserve policy tightening.

  2. The 10-year Treasury yield surged as high as 1.97% on Tuesday for the first time since Nov. 2019. The yield on the two-year note, which is more sensitive to interest rate expectations, reached 1.347 for the first time since February 2020.

  3. The pair rose early in the day to 115.674 yen, the highest since Jan. 10, before pulling back.

  4. The dollar remains supported by expectations for Fed’s multiple rate hike and persisting policy divergence between the U.S. and Japanese central bank. The market still sees little chance the Bank of Japan following suit to tighten this year before inflation hits the bank’s 2% target.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.35873 and 1.36493.

-        Support line of 1.34633 and 1.34013.

Commentary/ Reason:

  1. The pound opened higher against the dollar on Wednesday, was 0.13% higher at $1.35559 even though the greenback gained interest following the U.S. Federal Reserve rate hike narrative.

  2. The financial market’s mood seesaws as investors move in turbulent waters. Global central bank tightening monetary policy conditions and rising global bond yields keep market participants nervous.

  3. The GBP/USD pair has moved upwards for third day, as a series candles in the last few trading sessions have resulted in the return of buyers.

GBPUSD