INTRADAY TECHNICAL ANALYSIS 15 JULY (observation as of 05:45 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.18561 and 1.18824.
- Support line of 1.17711 and 1.17748.
Commentary/ Reason:
The euro bounced back to $1.18354 from Wednesday's 3-month low of $1.17716.
The pair rallied moderately on overall dollar weakness following dovish comments from Fed Chair Powell.
The dollar retreated following further reassurance from Fed chair Jerome Powell that he was in no rush to tighten policy. Powell said overnight that high inflation seemed linked to reopening, that it would be a mistake to act prematurely to tame it and that tapering bond buying was "still ways off".
Lower T-note yields also are negative for the dollar.
Powell will return to Capitol Hill later today for further testimony before Congress.
EUR/USD buyers have started to return in early trading after a rejection of the ascending trendline earlier today. Price action is likely to be contained by the 1.185 resistance area going forward. A longer-term bearish bias has been established.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.91990 and 0.92226.
- Support line of 0.91226 and 0.90990.
Commentary/ Reason:
The dollar was little changed at 0.91821 per franc on Thursday.
Worries about the economic fallout from the spread of the highly contagious Delta variant of the coronavirus underpinned the safe-haven Swiss franc. Which in turn, kept a lid on any further gains for the USD/CHF pair.
Powell's mid-July testimony hawkishness overnight meanwhile also weigh on the dollar.
As can be observed from the chart, the price has formed a mini range and is trading within the borders of it at the moment. We will be waiting for a breakout and a retest of one of the boundaries.
The USDCHF pair faced solid resistance at 0.919, noting that breaking support line will press on the price to start bearish wave.
The U.S. unemployment claims, industrial production, and the capacity utilization rate could bring more action tomorrow.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.39065 and 1.39420.
- Support line of 1.37915 and 1.37560.
Commentary/ Reason:
The dollar was up about 0.08% on the British pound. Sterling inched down to $1.38487 on Thursday.
The GBP/USD traded with high volatility due to the both the U.S. and the UK have reported higher-than-expected price rises. However, the increases are boosted by transitory factors on both sides of the pond, and what matters is what policymakers think about it.
England decision of abandoning COVID-19 restrictions next week is watched by traders as cases keep on climbing. A successful full reopening in the UK could be a huge factor in terms of confidence and pricing a broader and sustained recovery of the global economy, leading to a softer dollar as economies from Japan to Europe catch up with the robust rebound in the U.S.
We are of the opinion of neutrality for the pair until clearer signal for the next trend emerged. Oscillations are seeing price action return to support price level with consistency yet lacking conviction for the break. The pair is likely to consolidate within the range.
