Important Levels to Watch for:

-        Resistance line of 1.00462 and 1.00921.

-        Support line of 0.98975 and 0.98515.

Commentary/ Reason:

  1. The euro has found some stability near parity, edged 0.30% higher to $1.00253, adding to Monday's 0.29% rally, its biggest in almost three weeks.

  2. Hawkish ECB comments pushed up German bund yields and strengthened the euro’s interest rate differentials.  The 10-year German bund yield climbed to a 2-month high Monday at 1.545%. ECB Governing Council member Kazaks said the ECB needs to act forcefully and raise interest rates by at least 50-bps next month to bring inflation back under control.

  3. The EUR/USD also garnered support from a plunge in European nat-gas prices, which temporarily eased concerns about an energy crisis.  European nat-gas prices sank -19% Monday after German economy minister Robert Habbeck said the country was filling gas storage facilities faster than expected.




Important Levels to Watch for:

-        Resistance line of 0.97120 and 0.97326.

-        Support line of 0.96456 and 0.96250.

Commentary/ Reason:

  1. The dollar remains strong against the Swiss franc, gained 0.20% to 0.96917 franc on Tuesday.

  2. The greenback is currently in bullish mode, following statements by U.S. Federal Reserve Chairman Jerome Powell, who reaffirmed that the interest rate for the U.S. dollar should remain high for some time.

  3. The flight to safety has helped put a fresh bid under the greenback.

  4. Further, the rebound in the U.S. Treasury yields amid the revival of hopes for aggressive Fed tightening has also collaborated with the renewed buying around the dollar.

  5. The USD/CHF pair shows more bullish bias, noticing that stochastic gathers the positive momentum clearly, waiting to motivate the price to provide positive trades to visit 0.9712 that represents our next target. Bullish overview will remain active conditioned by the price stability above 0.9645.




Important Levels to Watch for Today:

-        Resistance line of 139.851 and 141.273.

-        Support line of 137.007 and 135.585.

Commentary/ Reason:                                        

  1. The dollar slid 0.20% to 138.230 yen on Tuesday, after rising to 139 overnight for the first time since mid-July.

  2. The Japanese yen rebounded to trade marginally higher against the U.S. dollar on renewed buying interest, despite continuous strengthening of the greenback.

  3. Yen’s gains, however, were limited as strong Fed’s hawkish stance that signals prolonged period of higher borrowing cost but also widens the divergence between the U.S. and BoJ’s monetary policies, remains the main driver of the U.S. dollar, along with growing uncertainty about further slowdown in economic growth, as a result of higher interest rates.

  4. The USD/JPY pair shows sideways trades since yesterday, and stochastic begins to get rid of its negative momentum, waiting to get positive momentum that assists to push the price to resume the bullish wave that targets 139.851 as a next station.

  5. Bullish trend scenario remains valid and active for the upcoming period as long as 137.007 remains intact, with EMA50 continues to support the expected rise.




Important Levels to Watch for:

-        Resistance line of 1.18053 and 1.19083.

-        Support line of 1.15993 and 1.14963.

Commentary/ Reason:

  1. Sterling rose 0.28% to $1.17405 on Tuesday, continuing from its lowest level since March 2020, when the COVID-19 pandemic crippled the global economy and wreaked havoc in financial markets.

  2. The pound was hit hard on Monday due to thin trading on the bank holiday in the UK.

  3. Dollar pulled back on Tuesday following investors raising their bets for a 75-bps hike by the ECB. Financial markets meanwhile expect the BoE to raise its main rate by 50-bps to 2.25% at its September meeting, which would be the seventh consecutive rate hike and push borrowing costs to the highest since 2008.

  4. Political uncertainty ahead of a new UK prime minister to be chosen next month limits the gains in the pair.

  5. The GBP/USD pair might return to decline after the temporary rise that it witnessed yesterday, noticing that stochastic begins to overlap negatively now, waiting to motivate the price to provide more negative trades to visit 1.1600 as first target.

  6. The EMA50 support the suggested bearish wave, taking into consideration that breaching 1.1805 will lead the price to start correctional bullish wave on the intraday basis.