INTRADAY TECHNICAL ANALYSIS 21 JUNE (observation as of 08:50 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.05729 and 1.06173.

-        Support line of 1.04293 and 1.03849.

Commentary/ Reason:

  1. The euro gained 0.50% to $1.05627 on the improved risk sentiment, after European stock markets chalked up modest gains to recover a little from last week's hefty losses.

  2. European Central Bank President Christine Lagarde meanwhile restated officials’ intention to raise interest rates in July and September, signalling those concerns over financial-market tensions aren’t derailing the fight against inflation. The ECB is planning to raise rates for the first time in more than a decade next month, joining peers around the world in hiking borrowing costs to combat record inflation in the currency bloc.

  3. The euro also soar following the release of Producer Prices data from Germany. Germany’s PPI is up by 33.6% on a year-over-year basis. High Producer Prices will inevitably push consumer prices higher, so the ECB will have to fight inflation. Such expectations are bullish for EUR/USD.

  4. The EUR/USD pair reached the thresholds of the first waited positive target at 1.0572, moving inside intraday bullish channel that supports the chances of achieving more rise in the upcoming sessions, and breaching the mentioned level will extend the bullish wave to reach 1.0617 as a next main station.

  5. The bullish trend will continue to be suggested for the upcoming period, noting that breaking 1.0429 will put the price under negative pressure that leads the price to return to the bearish track again.

EURUSD

              

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.97530 and 0.97963.

-        Support line of 0.96131 and 0.95699.

Commentary/ Reason:

  1. The dollar was flat against the Swiss franc on Tuesday, traded to 0.96651, as it trying to bounce off Friday’s two-week low.

  2. The pair’s movement were limited on the day as traders preferring riskier asset compared to the safe haven currencies.

  3. The bears keep reins during Tuesday’s session amid broad U.S. dollar weakness and cautious optimism in the market ahead of the key events.

  4. A light calendar and traders’ indecision over the market’s next moves, despite holding fears of faster monetary policy tightening and economic slowdown, also exerted downside pressure on the USD/CHF prices.

  5. Looking forward, Swiss trade numbers for May will precede the Chicago Fed National Activity Index and the US Existing Home Sales for the said month to entertain short-term traders. However, major attention will be given to Fed Chairman Jerome Powell’s Testimony on the bi-annual Monetary Policy Report, on Wednesday and Thursday.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 136.194 and 137.434.

-        Support line of 132.182 and 130.942.

Commentary/ Reason:                                        

  1. The Japanese yen remained under pressure at 135.340 yen per US dollar, not far off a 24-year low of 135.573 yen hit early last week.

  2. A generally positive tone around the equity markets, along with the Fed-BoJ monetary policy divergence, undermined the safe-haven Japanese yen and extended some support to the greenback.

  3. The yen remained weighed as the Bank of Japan stuck doggedly to its super-easy policies even as all its developed world peers took steps to tighten. The BOJ on Friday bucked a wave of tightening that included the Fed, Bank of England and even a shock half-point hike from the Swiss National Bank. It also resisted attacks from bond market speculators testing the monetary authority's commitment to its 25-basis point tolerance band around the zero percent target for the 10-year Japanese government bond yield.

  4. The USD/JPY pair didn’t show any strong move since yesterday, to fluctuate within tight track around 135.00. The expected trading range for today is between 132.182 support and 136.194 resistance.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.24926 and 1.26320.

-        Support line of 1.20414 and 1.19020.

Commentary/ Reason:

  1. Sterling ticked up 0.48% to $1.23049.

  2. The improving risk sentiment helps the British pound stay resilient against its rivals on Tuesday, though the near-term technical outlook doesn't yet point to a build-up of bullish momentum.

  3. The GBP/USD fluctuated wildly in the second half of the previous week as investors digested the U.S. Fed and the BoE’s policy decisions. The Fed hiked its policy rate by 75-bps and the BoE raised its rate by 25-bps. Both central banks voiced their commitment to stay on the tightening path until they see convincing signs of price pressures easing.

  4. Volatility seems likely this week with UK inflation figures expected to show another alarmingly high reading that could push the Bank of England into hiking at a faster pace.

  5. The GBP/USD pair trades positively to move away from 1.2041 level, reinforcing the expectations of continuing the bullish trend, while the price needs to surpass 1.2492 to ease the mission of heading towards further target at 1.2632.

  6. Bullish trend scenario will remain valid and active conditioned by the price stability above 1.2041.

GBPUSD