INTRADAY TECHNICAL ANALYSIS 27 MAY (observation as of 05:30 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.22630 and 1.22947.
- Support line of 1.21604 and 1.21287.
Commentary/ Reason:
The euro traded at $1.21946 against the dollar, edging closer towards its 1-week low touched Friday.
The euro falling for a second straight session after the ECB Executive Board’s Director, Fabio Panetta said it was too early to taper its emergency bond buying programme.
The dovish ECB comments sent bund yields tumbling, which weighed on EUR/USD. The 10-year German bund yield fell to a 2-week low Wednesday of -0.212%.
The decline however was slowed down as the president of the European Commission said on Tuesday that the EU is on track to safely reopen society after the COVID-19 pandemic, adding the bloc is on track to reach its goal of vaccinating 70% of the adult population by the end of July.
EUR/USD volatility continues with buyers and sellers taking it in turn to dominate trading sessions. As such, the pair has now returned to the 1.216 support level, as sellers returned in yesterday’s session. Overall, the long-term bullish trend remains intact. Momentum indicators have stalled in bullish territory.
U.S. GDP and preliminary prices data is due later today, along with initial jobless claims, where a small decline is forecast. The PCE deflator will be even more closely watched as the preferred core inflation guide, due on Friday.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.89988 and 0.90185.
- Support line of 0.89352 and 0.89155.
Commentary/ Reason:
The dollar traded lower against the Swiss franc on Monday, slipped 0.10% to trade at 0.89703, reversing overnight 0.35% gains.
The dollar was weighted by the inflation worries, lower U.S. Treasury yields and expectations of reduction in the Fed’s stimulus. Though still favoured by some due to persistent concerns over a resurgence of COVID-19 and global lockdowns.
The Swiss franc meanwhile were weighted as years of talks to bind Switzerland more closely to the EU’s single market collapsed on Wednesday, when the Swiss government ditched a draft 2018 treaty cementing ties with its biggest trading partner.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.41741 and 1.41993.
- Support line of 1.40925 and 1.40673.
Commentary/ Reason:
The British pound stood at $1.41121 against the dollar, dipped to a week-low of $1.40911 on Thursday.
Dollar strength clipped the wings of the pound year-to-date gain which is up 3.2% as Britain’s vaccination drive rekindles its economy.
A higher 10-year T-note yield helped the dollar to climb higher against the sterling.
