INTRADAY TECHNICAL ANALYSIS 11 AUGUST (observation as of 05:15 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.17449 and 1.17583.
- Support line of 1.17016 and 1.16883.
Commentary/ Reason:
Six straight sessions of dollar gains against the euro sent the common currency to its lowest since late March overnight. The pair traded at $1.17185 on Wednesday, as the year-to date lows of $1.17035 is within range.
The euro came under pressure after the German Aug ZEW survey expectations of economic growth index fell -22.9 to a 9-month low of 40.4, weaker than expectations of 55.0.
The dollar meanwhile strengthened as traders awaited U.S. inflation data and wagered a high reading could pressure the Federal Reserve to wind back policy support.
The U.S. Senate's passage of a $1 trillion bipartisan infrastructure package also brings dollar supported. With new coronavirus cases rising in the U.S., progress on the infrastructure package should support the recovery in the world's largest economy.
The recent downtrend of the EUR/USD suggests price would briefly penetrate 2021 bottom at 1.1704, however, loss of downward momentum is expected to keep price above 1.1688 and risk has increased for a minor correction to occur later this week. Attempted recovery, however, will only be a corrective wave that may not be able to overcome the 1.175 hurdle. It means any upside might be a dead cat bounce and a strong selling opportunity.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.92460 and 0.92636.
- Support line of 0.91889 and 0.91712.
Commentary/ Reason:
The greenback touched a 1-month high of 0.92336 Swiss franc overnight and holding near those levels today.
The dollar traded at 0.92276 on Wednesday against the Swiss franc.
The pattern of dollar gains is expected to continue, with Wednesday's inflation data offering another possible nudge.
A hawkish remark by the Fed official early in the week of rates tightening also helped pushed the dollar higher.
The USD/CHF pair surpassed 0.9200 level to confirm the continuation of the bullish wave on the intraday and short-term basis, and the way is open to achieve our next target at 0.924 and 0.926, noting that breaching these levels will lead the price to achieve more rises on the longer term basis.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.38917 and 1.39387.
- Support line of 1.37977 and 1.37507.
Commentary/ Reason:
The greenback renewed a more than 2-week high against the British pound earlier today and holding near the level at $1.38292.
Speculative interest is cautious ahead of the U.S CPI index, as the possibility of news on Fed tapering supported the dollar.
From a technical point of view, the GBP/USD pair is bearish. The GBP/USD pair is beginning to pull back from the 1.389 resistance line, as buyers once again fail to clear the upper bound of the current trading range. Oscillations within range are therefore likely to continue in the absence of strong bullish conviction
