INTRADAY TECHNICAL ANALYSIS 12 JULY (observation as of 06:00 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.18935 and 1.19041.

-        Support line of 1.18513 and 1.18407.

Commentary/ Reason:

  1. The euro traded at $1.18632, edging back from its 3-month low of $1.17816 set on Wednesday.

  2. The euro were supported after the ECB President Christine Lagarde caught markets by surprise, saying the bank will change its guidance on policy at its next meeting and show it is serious about reviving inflation. The ECB's new strategy allows it to tolerate inflation higher than its 2% goal when rates are near rock bottom.

  3. Fears about slowdown of global economic recovery also appeared to have subsided, thus supported the risk currencies against the dollar.

  4. The outlook for U.S. inflation and the speed of the Federal Reserve's future policy tightening are back in focus ahead of Tuesday's CPI data and Fed Chair Jerome Powell's testimony Wednesday. A strong data could see that Fed bringing forward their projection for their first rate hike further from their current forecast of 2023.

  5. The EUR/USD on Monday is testing the ascending trendline after breaking a last week’s resistance level price line. A break would signal a price recovery and the return of bullish conviction. Momentum indicators appear to be undergoing bullish reversals.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.91574 and 0.91774.

-        Support line of 0.91174 and 0.90974.

Commentary/ Reason:

  1. The dollar bounced back against the Swiss franc after slumped for the last two days.

  2. On Monday, the dollar added 0.14% to trade at 0.91499.

  3. The dollar was higher after alternating between losses and gains in the several recent sessions. The outlook for U.S. inflation and Fed Chair Jerome Powell's testimony throughout the week will be digested for the next trading clues.

  4. The dynamics around the U.S. dollar expected to continue to influence the pair’s performance for the time being.

  5. The USD/CHF pair shows tight trades near the key support 0.911, keeping its stability above it until now, to keep the chances valid to resume the expected bullish trend on the intraday basis, which its targets begin by testing 0.915 level. The bullish overview is kept unless there is a break of the support line.

USDCHF

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.39300 and 1.39455.

-        Support line of 1.38680 and 1.38525.

Commentary/ Reason:

  1. Sterling slipped to $1.38829, down -0.14%, unable to continue its climb earlier in the day. The pair scale a 1-week high of $1.39094 on Asian morning trade.

  2. However, it slipped as investors curtailed their bets on them, in part as economic data from many countries fell short of the market's expectations.

  3. Concerns about the COVID-19 cases also added to the cautious mood. UK reported over 32,000 new cases on Saturday, although most cases hospitalizations are from non-vaccinated people.

  4. Additionally, tensions with the EU over Brexit continue. The dispute now gyrates around the size of the UK’s Brexit bill, as the Union indicated that Britain would be obliged to pay €47.5 billion as part of its post-Brexit arrangements.

  5. The GBP/USD pair rallied upwards strongly to breach the 1.380 support level, as buyers return to drive price action towards the 1.399 price line, once again. Bullish conviction will be tested and the pair may now consolidate within the current trading range. Momentum indicators are beginning reversals.

GBPUSD