INTRADAY TECHNICAL ANALYSIS 13 JULY (observation as of 05:10 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.18875 and 1.19051.
- Support line of 1.18304 and 1.18127.
Commentary/ Reason:
Against the dollar, the euro traded at $1.1861 on Tuesday, pulled back higher, off 0.12% slip yesterday.
German wholesale price data on Monday was hawkish for ECB policy and positive for EUR/USD after the German May wholesale price index increase largest in 39 years.
However, the common currency weighed after ECB President Christine Lagarde hinted at a dovish shift to the rates outlook for Europe. Lagarde signaled that the ECB might begin fresh stimulus measures next year after its PEPP program expires.
Investors will look to U.S. inflation data later today and Fed Chair Jerome Powell's economic testimony on Wednesday and Thursday, with expectations for the Fed to dial back on stimulus as soon as this year.
A hotter report will likely boost Treasury yields and the dollar and bring the Fed taper conversation back to the forefront.
Before then Fed officials Neel Kashkari, Raphael Bostic and Eric Rosengren are to make appearances on Tuesday.
The EUR/USD is testing the ascending trendline after breaking a resistance level yesterday. A further break would signal a price recovery and the return of bullish conviction.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.91770 and 0.91942.
- Support line of 0.91214 and 0.91042.
Commentary/ Reason:
The franc was steady at 0.91481 per dollar, close to a 1-month high.
The pair was 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.
The dynamics around the U.S. dollar expected to continue to influence the pair’s performance for the time being.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.39224 and 1.39503.
- Support line of 1.38322 and 1.38043.
Commentary/ Reason:
Sterling held at $1.38880 on Tuesday, holding just below its 1-week high of $1.39094 touched yesterday.
The pound is holding amid nerves about England abandoning COVID-19 restrictions next week even as cases keep on climbing. The rising COVID-19 cases continue to trigger some safe-haven flows into the greenback.
The pair moves in a narrow trading range ahead of the U.S. CPI data. The pair fades out its rally after the highly anticipated US-UK trade deals hope dashed out as reports surfaced that there will be likely no agreement for at least two years.
The GBP/USD pair has rebounded emphatically from the 1.380 support level, as buyers return to drive price action towards the 1.39 price line, once again. Bullish conviction will be tested, and the pair may now consolidate within the current trading range.
