INTRADAY TECHNICAL ANALYSIS 4 JULY (observation as of 09:00 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.05319 and 1.05701.
- Support line of 1.04080 and 1.03697.
Commentary/ Reason:
The euro was flat at $1.04254 on Monday, and not far from its recent five-year trough of $1.03498.
EUR/USD has gone into a consolidation phase following last week's decline, as investors reassess ECB's policy outlook after mixed inflation data last week.
Data on Friday showed euro zone inflation surging to another record, adding to the case for the ECB to raise interest rates this month.
The European Central Bank is expected to raise interest rates this month for the first time in a decade, and the euro could get a lift if it decides on a more aggressive half-point move.
The fears of a slowing global growth burnished the greenback's appeal as investors sought safety due to its haven status.
The EUR/USD pair traded with negativity to approach our waited target at 1.0408, with the EMA50 keeps pressing negatively on the price.
Bearish trend will continue to be suggested for the upcoming period, noting that breaking the targeted level will extend the bearish wave to reach 1.0369 areas as a next main station, unless the price rallied to breach 1.0531 and hold above it.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.96431 and 0.96853.
- Support line of 0.95065 and 0.94643.
Commentary/ Reason:
The USD/CHF fades bounce off intraday low as sellers flirt with three-day-old support heading into Monday’s European session. Traders pare recent moves amid US holiday.
The pair trades around 0.95987 by the press time.
Strong prints of the Swiss inflation data add strength to the bearish bias over the USD/CHF pair.
Moving on, major attention will be given to the recession chatters and this week’s Fed Minutes, as well as Friday’s US jobs report for June, as Fed hawks struggle to gain acceptance.
Stock and bond markets in the U.S. will be closed in observance of the Independence Day holiday and trading action is likely to remain subdued.
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 137.144 and 138.417.
- Support line of 134.598 and 133.325.
Commentary/ Reason:
The Japanese yen traded at 135.285 per dollar, strengthening from levels as weak as 137 per dollar last week.
The Japanese yen attracted some safe haven flows late last week, dragging the dollar lower from a 24-year top of 137.
After hitting a multi-year high on June 29, momentum has been trending lower as concerns about prospects for the global economy are increasing the appeal of the safe-haven Japanese Yen. Growth fears has tempered U.S. rate hike expectations and weigh on the greenback.
Divergent central bank policies, however, continue to limit yen’s movement, with the Fed, BoE, and ECB ending their QE programs and raising interest rates while the BoJ maintains its QE program and record low interest rates. The BoJ is able to keep interest rates pinned down because Japanese inflation is still low by global standards, though even small price rises are causing a messaging problem for the central bank.
Trade is likely to be lightened today on the Independence Day holiday in the United States.
The USD/JPY pair reinforcing the expectations of continuing the bearish trend on the intraday basis, waiting to visit 134.598 as a first station, noting that breaking this level will extend the bearish wave to target 133.325 as a next negative station.
On the other hand, breaching 137.144 and holding above it will push the price back to the bullish track.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.22056 and 1.22820.
- Support line of 1.19584 and 1.18820.
Commentary/ Reason:
Sterling last bought $1.21210 on Monday, bouncing off a two-week low of $1.19759 hit on Friday.
The GBP/USD pair broke previous sessions’ support line and rallied below 1.2000 barrier, before rebounds bullishly for now, noticing that stochastic loses its positive momentum clearly, while the EMA50 forms continuous negative pressure on the price.
The bearish trend will still be suggested for the upcoming period, which depends on the price stability below 1.2205, with the next target is located at 1.1958.