INTRADAY TECHNICAL ANALYSIS 5 MAY (observation as of 05:00 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.20626 and 1.20887.
- Support line of 1.19846 and 1.19605.
Commentary/ Reason:
The euro was steady on Wednesday after fell 0.4% overnight against the dollar. The euro was last at $1.20236.
The euro rebounded from its 1-week low overnight after the Federal Reserve Chair Jerome Powell argued the labour market is still far short of where it needs to be to start talking of tapering asset buying, while Yellen later downplayed the importance of rate hikes.
The euro was put under pressure overnight sparked by comments from U.S. Treasury Secretary Janet Yellen that rate hikes may be needed to stop the economy from overheating.
Three more Fed officials are speaking later Wednesday providing the opportunity for further market-moving comments.
The EUR/USD has pulled back to the descending trendline and the 1.198 support level as bearish sentiment appears to be rising. A break would confirm a resumption of the previous downtrend.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.91674 and 0.91287.
- Support line of 0.91022 and 0.90820.
Commentary/ Reason:
The dollar slipped against the Swiss franc on Wednesday, to trade at 0.91287.
The positive outlook for the dollar wobbled as Treasury yields slipped. Lower T-note yields were negative for the dollar with the 10-year T-note falling to a 1-week low of 1.555% overnight.
Investors will now look to the U.S. payrolls data on Friday for new trading cues.
Demand for the safe-haven greenback however is still favoured by some due to persistent concerns over a resurgence of COVID-19 and global lockdowns, although the decline in the Treasury yield capped optimism.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.39193 and 1.39460.
- Support line of 1.38327 and 1.38060.
Commentary/ Reason:
Sterling rose 0.2% to $1.39096 on better-than- expected PMI figures.
British manufacturing activity grew at the fastest pace in almost 27 years last month, amid supply chain delays and shortages of raw materials, as businesses tried to make up for ground lost during the coronavirus pandemic.
Price pressures however are on the radar of the Bank of England as it finalises new forecasts and policy decisions ahead of their release on Thursday, as the BoE may announce a slowdown in its bond buying program as the vaccine rollout bolsters Britain's economy.
The GBP/USD pair continuing the ascending trendline as the pair moves upward towards the 1.394 ceiling. Several failed break attempts suggest that currently, sellers lack the conviction to drive a trend change.
