INTRADAY TECHNICAL ANALYSIS 1 JULY (observation as of 05:30 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.19098 and 1.19350.
- Support line of 1.18282 and 1.18030.
Commentary/ Reason:
The euro edged down to $1.18471 against the dollar, now looking to dip to its lowest since April.
The euro tumbled on lower German bund yields and benign Eurozone inflation data.
The benign inflation data on Wednesday is dovish for ECB policy and negative for EUR/USD, while the Germany's 10-year government bond yield fell to a 1-week low, which weakened the euro’s interest rate differentials.
The dollar meanwhile found safe-haven support as concern grows that more countries will need to reimpose pandemic lockdowns as the dangerous Delta COVID-19 variant spreads throughout the world.
Signs of a tight labour market kept many investors fretting over wage-driven price pressures. Friday's payroll data is a key focus - with economists expecting an increase of 675,000 jobs. Some reckoning on the dollar falling back into a downtrend if the jobs data passes without surprise.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.92760 and 0.92998.
- Support line of 0.91992 and 0.91754.
Commentary/ Reason:
The dollar advanced for the fourth consecutive days against the Swiss franc, added 0.12% to trade at 0.92603 on Thursday.
The U.S. economic data boosted the greenback. The dollar as safe-haven currency also benefited from demand driven by concerns over the spread of the Delta virus strain.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.38796 and 1.39087.
- Support line of 1.37857 and 1.37567.
Commentary/ Reason:
Sterling slipped 0.13% to $1.38098, hovering at a recent 2-month low.
The pound declined as investors remain concerned about the spreading delta variant of COVID-19 and the concern of the health of the UK economy. The PM Johnson’s administration decided to extend the lockdown to later this month after recording higher coronavirus cases.
The GBP/USD will have three key catalysts today. First is the latest UK Manufacturing PMI data by the Markit. Next is the U.S. manufacturing data by Markit and the ISM. Other data is the U.S. initial and continuing jobless claims numbers. The Labor Statistics also will publish the latest non-farm payrolls numbers set for tomorrow.
The pound will also be affected by a statement by Andrew Bailey, the BoE’s governor. This will be the first speech after the bank delivered its interest rate decision in June. The governor’s speech will likely set the tone for what to expect later this month.
