INTRADAY TECHNICAL ANALYSIS 6 MAY (observation as of 05:00 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.20324 and 1.20487.
- Support line of 1.19796 and 1.19633.
Commentary/ Reason:
The euro traded just above the $1.20 mark on Thursday, after dipping to $1.1986 on Wednesday for the first time since April 19.
The pair last traded at $1.20029.
A steadying T-note yields strengthened the dollar's interest rate differentials as the 10-year T-note yield bounced on Tuesday.
The dollar cooled off after the U.S. Treasury Secretary Yellen clarified her comment by saying she was not predicting or recommending interest-rate increases when remarking about the impact of fiscal spending on the U.S. economy.
So far, Fed Chair Jerome Powell has argued the labour market is far short of where it needs to be to start talking of tapering asset purchases. The central bank has said it will not raise its benchmark Fed funds rate through 2023.
The EUR/USD has pulled back to the descending trendline in a strong bullish move overnight, as sellers have returned to drive price action. If the pair breaks back below the trendline, bearish sentiment will likely continue. The 1.1979 price level remains a key support area.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.91673 and 0.91856.
- Support line of 0.91079 and 0.90896.
Commentary/ Reason:
The dollar jumped 0.14% against the Swiss franc on Thursday, to trade at 0.91396.
The Swiss franc traded lower against the U.S. dollar on renewed demand for the greenback as steady U.S. Treasury yields and increased risk aversion following surging COVID-19 cases, that lent support to the U.S. dollar.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.39358 and 1.39560.
- Support line of 1.38702 and 1.38500.
Commentary/ Reason:
The British pound was flat at $1.38985 ahead of the BoE policy review later today and Friday's U.S. monthly jobs report.
The Bank of England expected by some forecasters to announce a tapering of its bond-buying programme, after vaccinations bolstered Britain’s economic recovery.
Concerns relating to complications in AstraZeneca Plc’s shot and a higher T-note yields could throw a proverbial wrench in the works for the pound.
The Friday's U.S. monthly jobs meanwhile is expected to show that nonfarm payrolls increased by 978,000 jobs last month.
The GBP/USD pair continues to oscillate higher with price action being contained by the ascending trendline. With oscillations narrowing, we may expect a pressure build around the trendline where a breakout may occur.
