INTRADAY TECHNICAL ANALYSIS 10 MAY (observation as of 06:00 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.21860 and 1.22029.

-        Support line of 1.21522 and 1.21353.

Commentary/ Reason:

  1. The euro slipped 0.1% to $1.21522, retreated after earlier touching the highest since Feb. 26 at $1.21763.

  2. The euro was higher on hawkish comments from ECB Governing Council member Kazaks on Friday who said the ECB could decide to scale back its PEPP program as early as June if the Eurozone economy doesn't deteriorate.

  3. The dollar slipped on Monday as investors continued to assess the implications for monetary policy of a disappointing U.S. employment report, ahead of inflation data this week. The unexpected slow recovery in the U.S. labour market reinforces the FOMC's patient approach to monetary policy.

  4. The EUR/USD has found significant support in the latest rally attempt and the result is a test of the 1.217 resistance level, which has previously been an obstacle to any bullish moves. Momentum indicators have flattened in bullish territory, yet there is further upside potential.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.90354 and 0.90508.

-        Support line of 0.89738 and 0.89584.

Commentary/ Reason:

  1. The dollar traded slightly higher against the Swiss franc on Monday, to trade at 0.90180, although the pair trended in descending trendline and recorded a new more than 1-month low earlier today.

  2. The dollar was weighted by the inflation worries, lower U.S. Treasury yields and expectations of reduction in the Fed’s stimulus.

  3. Meanwhile asset tapering talks, and increased risk aversion following surging COVID-19 cases, lent support to the U.S. dollar.

USDCHF

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.40576 and 1.40767.

-        Support line of 1.39958 and 1.39767.

Commentary/ Reason:

  1. The British pound opened the week on a positive note, supported by a broadly weaker U.S. dollar, higher oil prices and an enduring global economic recovery despite the "swing and a miss" on last Friday's US jobs report.

  2. The British pound traded at $1.40474, rose 0.44% on Monday.

  3. The pound rising as high as $1.40573 for the first time since Feb. 25, despite Scotland's leader saying another referendum on independence was inevitable after her party's resounding election victory.

  4. The GBP/USD pair has once again rebounded from the ascending trendline, as bullish momentum remains.

GBPUSD