INTRADAY TECHNICAL ANALYSIS 8 JULY (observation as of 08:10 UTC)


Important Levels to Watch for:

-        Resistance line of 1.2228 and 1.2522.

-        Support line of 1.01277 and 1.00984.

Commentary/ Reason:

  1. The euro edged closer to parity with the safe-haven dollar, to last trade at $1.01289.

  2. The euro is down more than 2.5% this week and posted a fresh 20-year low, licking its wounds at the end of its worst week in two months as investors braced for Europe to tip into recession, while markets awaited U.S. jobs data to set the next direction for the dollar.

  3. A stronger figure could allay some recession worries but would probably add to rate hike bets and could lift the dollar.

  4. The EUR/USD remains under pressure on concern the ECB will be slow to tighten monetary policy, which has weakened the euro’s interest rate differentials.

  5. The EUR/USD pair resumed its negative trading to trade below 1.0200 barrier, reinforcing the expectations of continuing the bearish trend, which targets 1.0127 as a next main station.




Important Levels to Watch for:

-        Resistance line of 0.97899 and 0.98569.

-        Support line of 0.96559 and 0.95889.

Commentary/ Reason:

  1. The dollar rose 0.5% on Friday session, last bought 0.97868 franc.

  2. The pair is heading for 1.5% gain for the week, after advancing every day in the week.

  3. The greenback standing out as a safe-haven currency as traders digested Fed’s latest meeting minutes. Also keeping the market hopeful were headlines concerning China and mixed data from the US.

  4. Sentiment remains mixed, courtesy of recession threats and inflation concerns. The market narrative hasn’t changed, with high inflation and global economic slowdown, keeping investors uneasy.

  5. Moving on, risk catalysts are important for the USD/CHF pair traders to watch ahead of the US employment data. The forecast suggest that the headlines Nonfarm Payrolls (NFP) will post the lowest monthly increase in jobs since April last year, by easing to 268K from 390K for June while the Unemployment Rate is likely to stay unchanged at 3.6% for the said month.

  6. The USD/CHF pair at below the candlestick of 0.9789 level, to supports the continuation of the expected bullish trend for the upcoming period, paving the way to head towards our next positive target at 0.9856.

  7. The EMA50 continues to support the suggested bullish wave, noting that breaking 0.9655 will press on the price to decline towards 0.9588 areas before any new attempt to rise.




Important Levels to Watch for Today:

-        Resistance line of 137.144 and 138.417.

-        Support line of 134.598 and 133.325.

Commentary/ Reason:                                        

  1. Growing unease at the world's economic outlook has steadied a sliding Japanese yen, as investors look for safety.

  2. The Japanese yen strengthened 0.09% at 135.843 per dollar.

  3. The Japanese yen were slightly higher against the U.S. dollar on Friday, in what appeared to be safe haven buying in the minutes after news that former prime minister Shinzo Abe had been shot. Abe had been taken to hospital after collapsing while delivering a speech in the western city of Nara.

  4. Though the Japanese yen will likely remain weak as a gap between Japanese and U.S. benchmark yields weighs on the currency.

  5. The BoJ remains the only major central bank that has maintained ultra-easy policies at a time other major economies are racing ahead with interest rate hikes to combat surging inflation. The BoJ left its key interest rates unchanged at its June meeting and vowed to defend an implicit 0.25% yield cap on the 10-year Japanese government bond.

  6. A rally in global equity markets today also reduced safe-haven demand for the yen.  

  7. The USD/JPY pair didn’t show any strong move since the last two days, to continue fluctuate around 136.00 level, thus, no change to the bearish trend scenario that depends on the price stability below 137.144, while its next main target is located at 134.598.




Important Levels to Watch for:

-        Resistance line of 1.21320 and 1.22056.

-        Support line of 1.18514 and 1.17647.

Commentary/ Reason:

  1. Sterling was last trading at $1.19461, down 0.62% on the day after it reverse course trading higher earlier following UK Prime Minister Boris Johnson announcement of his resignation.

  2. The pair is headed for around 0.60% weekly losses. On Wednesday, the pound had hit its lowest since March 2020.

  3. Although political uncertainty may cause volatility from time to time, it is unlikely to become the main driver of sterling in the short term. The BoE’s monetary policy and the UK macroeconomic outlook remains more relevant for the pound.

  4. Investors also digested balanced comments from Bank of England chief economist Huw Pill, who said he was willing to step up the pace of rate hikes depending on the economic data, but preferred a "steady-handed" approach to "one-off bold moves," which can "be disturbing."

  5. The BoE has raised interest rates five times since December, raising rates to 1.25% from 0.1%.

  6. The greenback meanwhile continued to strengthen its appeal as a safe-haven currency amid the risk-off sentiment surrounding the market.