INTRADAY TECHNICAL ANALYSIS 19 JULY (observation as of 06:10 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.18534 and 1.18750.
- Support line of 1.17834 and 1.17618.
Commentary/ Reason:
The euro was mostly flat at $1.18028.
The pair now waited for more markets indications after both were weighted by the dovish comments from the policymakers.
Benchmark 10-year Treasury yields dropped to a near 2-week low at 1.279%.
A slump in German bund yields has also weakened the euro’s interest rate differentials after the 10-year German bund yield fell to a 3-1/2 month low Friday.
The EUR/USD pair fluctuates within tight track and settles around 1.1800. EUR/USD failed to extend the bounce off a 3-month low, staying inside a bullish falling wedge formation. Price action is likely to be contained going forward. Momentum indicators have flattened in bearish territory.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.92115 and 0.92428.
- Support line of 0.91100 and 0.90786.
Commentary/ Reason:
The dollar advanced against the Swiss franc, rose 0.11% to trade at 0.91952 per franc on Monday.
The U.S dollar is strengthening due to the government's quantitative easing. Nevertheless, concerns about the spread of the highly contagious Delta variant of the coronavirus continued weighing on investors' sentiment, which extend some support to the safe-haven Swiss franc.
The USD/CHF pair oscillates within tight track, staying inside a bullish falling wedge formation. Price action is likely to be contained going forward.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.39027 and 1.39393.
- Support line of 1.37840 and 1.37473.
Commentary/ Reason:
Sterling teetered at $1.37510, slipped to its lowest in more than week.
The pound extended its third day downtrend against the U.S. dollar today due to the continuing lack of buying interest, as investors remained concerned over the surge in the COVID-19 cases. On Saturday, the UK reported 54,674 new coronavirus cases, the biggest 1-day increase since January, and 41 new deaths.
Traders are holding their breath as England lifts most social curbs. The hopes ride on so called "Freedom Day" with England betting its rush to vaccinate the population will mean people are less likely to fall seriously ill with COVID-19.
Later today, BOE’s Haskel will offer a speech that may include hints on the future of monetary policy. Meanwhile, the focus remains on COVID-19 developments.
From a technical point of view, the GBP/USD pair is poised to extend its decline. The daily chart shows that it extended its decline below a mildly bearish 20 SAM after failing to regain ground beyond it. In recent trading, sellers have been unable to push price action below the support line. This price area will therefore be a test of sellers’ conviction. Momentum indicators are oscillating in bearish territory.
