INTRADAY TECHNICAL ANALYSIS 31 MAY (observation as of 07:00 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.22196 and 1.22356.

-        Support line of 1.21675 and 1.21514.

Commentary/ Reason:

  1. The euro was little moved at $1.21879, just off Friday’s low of $1.21328.

  2. The U.S. inflation data released on Friday briefly drove the greenback higher, though the currency were expected to run out of steam ahead of a long weekend in New York and London.

  3. A decline in T-note yields was negative for the dollar after the 10-year T-note yield fell and weakened the dollar’s interest rate differentials.

  4. Eurozone economic data meanwhile was hawkish for ECB policy and bullish for EUR/USD.  Eurozone May economic confidence rose to a 3-1/3 year high. While the German Apr import price index rose at the fastest pace of increase in 10-1/3 years.

  5. EUR/USD price action has narrowed and despite strong buying pressure in last week’s trading, the rally has not yet resumed. Price action will likely languish around the 1.216 support level. Momentum indicators have stalled in bullish territory.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.90139 and 0.90322.

-        Support line of 0.89773 and 0.89590.

Commentary/ Reason:

  1. The Swiss franc traded lower against the U.S. dollar today, as investors returned to safe-haven currencies due to cautious sentiment on the global market.

  2. The dollar rose fractionally higher against the Swiss franc on Monday, to trade at 0.90002.

USDCHF

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.42507 and 1.43003.

-        Support line of 1.40900 and 1.40303.

Commentary/ Reason:

  1. The British pound barely moved at $1.41814 on Monday, in part to a seeming lack of directional drivers.

  2. Trading for the pair is expected to be relatively calm due to a UK and U.S. market holiday on Monday.

  3. The decision to lift final lockdown measures in England on June 21 will be made after data on infection, hospitalisation, vaccination, and new variants are assessed.

  4. The GBP/USD pair has made several attempts to move beyond the 1.420 resistance level and yet bullish conviction remains insufficient to drive the break. The indecision is in the pair as neither buyers nor sellers have the appetite to drive price action. Momentum indicators have flattened in bullish territory.

GBPUSD