INTRADAY TECHNICAL ANALYSIS 23 JULY (observation as of 06:10 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.18322 and 1.18607.
- Support line of 1.17402 and 1.17117.
Commentary/ Reason:
The euro was unchanged from the opening on Friday, to trade at $1.177699, and on track to 0.30% weekly loss.
It hit a 1-week high overnight, before slumped by a dovish tilt from the ECB when it pledged to keep interest rates at record lows for even longer.
ECB President Lagarde downplayed inflation concerns when she said in the near-term, the significant slack in the economy is holding back inflationary pressures and the medium-term inflation outlook is well below the ECB's goal.
EUR/USD maintained its losses after the Eurozone July consumer confidence indicator unexpectedly fell weaker than expectations, while the U.S. economic data was bearish for the dollar. U.S. weekly initial unemployment claims unexpectedly rose to a 2-month high.
The dollar meanwhile has safe-haven support from concern the worldwide spread of the Delta COVID-19 variant will crimp the global economic recovery.
Market's focus now shifting to next week's U.S. Fed meeting, where more discussion about tapering is expected, though Chair Jerome Powell has repeatedly said the labour market remains well short of target.
The EUR/USD floating back towards the support level as buyers appear to lack the appetite to facilitate a rally.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.92125 and 0.92319.
- Support line of 0.91497 and 0.91303.
Commentary/ Reason:
The franc was steady at 0.92040 per dollar, heads to end the week not far from Monday.
The pair was alternating between losses and gains in the several recent sessions, and with the market action turning subdued in the absence of high-tier data releases and fundamental drivers, the pair seems to have cone into a consolidation phase. Later today, the PMI data is awaited.
A modest recovery in the global equity markets undermined the safe-haven Swiss franc, which extended some support to the USD/CHF pair.
The dynamics around the U.S. dollar expected to continue to influence the pair’s performance for the time being. Traders also might take cues from the U.S. bond yields, which should influence the dollar price dynamics and produce some short-term trading opportunities around the major.
Intraday bias in USD/CHF remains neutral at this point, as rangebound trading is still in progress. The USD/CHF pair likely returns to rise and test 0.921 level again, waiting to surpass the mentioned level and open the way to visit 0.923.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.38102 and 1.38480.
- Support line of 1.36878 and 1.36500.
Commentary/ Reason:
The British pound traded about 0.1% lower at $1.37560 on Friday, although recovered from a more than 5-month trough of $1.35718 touched on Tuesday,
The sterling was buoyed by the recovery in risk sentiment, despite rising Delta variant cases in Britain and confusion about the lifting of restrictions.
The GBP/USD pair is climbing back towards the 1.381 resistance line after a break yesterday resistance level. Sellers meanwhile have returned in earlier trading which has stalled the would-be rally. The pair may once again consolidate at the 1.380 price level.
