INTRADAY TECHNICAL ANALYSIS 18 FEBRUARY (observation as of 07:10 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.14221 and 1.14874.
- Support line of 1.12915 and 1.12262.
Commentary/ Reason:
The euro continued its week of choppy trading, last at $1.13679 and headed for slight weekly gain.
The euro were subdued in a dull trade on Friday as caution prevailed over the unresolved Russia-Ukraine conflict, driving investors to safe-haven assets.
The expectation of an aggressive Fed hike cycle also keeping a base for the dollar in place, gains in the greenback were limited following Thursday’s weaker-than-expected U.S. economic data.
The EUR/USD has stalled in mid-range with a series of candles indicating indecision from both buyers and sellers. A long lower shadow in yesterday’s trading suggests some bullish bias, yet there is little justification for a rally based on fundamentals.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.92632 and 0.92854.
- Support line of 0.91916 and 0.91694.
Commentary/ Reason:
The dollar edging a tad higher against the Swiss franc on Friday, rising 0.15% to trade at 0.92121 franc after bounced off the 2-week low recorded overnight.
For weekly performance, the pair still headed for around 0.60% loss. The rival safe-haven, the Swiss franc have gained this week amid high geopolitical tensions between the West and Russia.
. The U.S. dollar also licks its wounds amid sluggish Treasury yields, as traders refrain to place any fresh directional bets.
Meanwhile, the Swiss National Bank remains committed to its ultra-loose monetary policy, as the latest labor data indicated that unemployment did not increase despite the Covid infection wave in January, while consumer inflation remains moderate.
The USD/CHF pair stuck between the key levels represented by the 0.9191 support and 0.9263 resistance, thus, our neutrality still valid until now.
Breaking the mentioned support will press on the price to head towards 0.9169 as a next negative target, while breaching the resistance will push the price to achieve additional gains that target testing 0.9285.
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 115.342 and 115.824.
- Support line of 114.574 and 114.288.
Commentary/ Reason:
The dollar traded at 115.167 per yen, 0.20% higher after bounced off a weekly low touched earlier today.
The pair, however, still weaker from opening this week, headed for a 0.35% weekly low.
The safe haven Japanese yen rose earlier today after U.S. President Joe Biden said Moscow is preparing a pretext to justify a possible attack on Ukraine, but reversed course later, giving up some its gains from earlier this week as markets seemed to take cheer from news of talks between the U.S. and Russia about Ukraine.
U.S. State Department said that Secretary of State Antony Blinken had accepted an invitation to meet with Russian Foreign Minister Sergei Lavrov late next week provided Russia does not invade Ukraine.
This provided some relief after a jittery Thursday following exchanges of fire between Kyiv's forces and pro-Russian separatists.
Markets were also focused on the Bank of Japan's policy, as the central bank continues with its policy of yield curve control. The BoJ this week offered to buy an unlimited amount of benchmark 10-year government bonds to underscore its resolve to contain domestic borrowing costs. Markets have not aggressively tested the BoJ's 0.25% yield target on those bonds, but yields on other tenors have been rising.
Meanwhile, in the U.S., policy makers have continued to publicly debate how aggressively the Federal Reserve should raise interest rates, and whether it should begin with a 25 or 50 basis point hike at its March meeting.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.36542 and 1.36867.
- Support line of 1.35491 and 1.35167.
Commentary/ Reason:
The pound was at $1.36132 supported by markets betting on more monetary tightening from the Bank of England.
Rate hikes expectation are supporting the British pound, after data on Wednesday showing British consumer prices rose at the fastest annual pace in nearly 30 years, intensifying the squeeze on households and reinforcing the chances that the BoE will raise interest rates by a further 25 basis points at its March meeting. That would be the first time the Bank has raised rates at three meetings in a row since 1997.
Gains in pair, however, were limited as caution prevailed over the rising tensions between Ukraine and Russia, driving investors to safe-haven assets.
Globally, investors stayed on the sidelines with eyes on a meeting between U.S. Secretary of State Antony Blinken and Russian Foreign Minister Sergei Lavrov later next week in hopes of a diplomatic solution for the East-West standoff over Ukraine.
Intraday bias in GBP/USD remains neutral for the moment, and focus stays on 1.3654 resistance. On the downside, though, break will turn bias to the downside for 1.3549 and 1.3516 supports instead.
