INTRADAY TECHNICAL ANALYSIS 12 AUGUST (observation as of 05:20 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.17023 and 1.16832.
- Support line of 1.17641 and 1.16832.
Commentary/ Reason:
The euro was little changed at $1.17438, bouncing off 4-month low of $1.17053 on Wednesday, which brought it just two tenths of a cent from the weakest level since early November.
The euro rose against the dollar today as the greenback retreated after the U.S July CPI report came in near expectations, which was dovish for Fed policy. Also weighing in the dollar Wednesday was the rally in the S&P 500 rose to a new record high, which reduced the liquidity demand for the dollar.
The dollar maintained moderate losses on dovish Fed comments by Atlanta Fed President Bosti and Chicago Fed President Evans.
Meanwhile in Europe, investor sentiment has declined, with a survey showing a third straight month of deterioration in Germany as rising global COVID-19 cases keep markets on edge.
Although the support line joins the yearly bottom to highlight the 1.1700 as the key support, a three-week-long resistance area near 1.176 becomes the immediate hurdle ahead of a bit longer horizontal region, from July 13, around 1.178, to challenge recovery. The currency major pair struggles for clear direction as a light calendar in Asia and dead news feed probes the corrective pullback from the yearly bottom marked the previous day.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.92458 and 0.92623.
- Support line of 0.91924 and 0.91759.
Commentary/ Reason:
The dollar against the Swiss franc eased from yesterday’s 1-month high to marginally changed on Thursday.
The pair traded at 0.92163 overnight and hovers in a very close trading range with a downside momentum.
The greenback retreated after the release of the U.S. CPI report confirmed moderating inflation.
If price breaks the session’s low, it could test the lower targets at the 0.919 and the 0.917 horizontal support levels.
Alternatively, any uptick in the MACD would force the bulls to continue to march higher toward the previous day’s high at 0.924. A closing of above the level would mark the breaking of the long-term trading range with an eye for the 0.926 horizontal resistance level followed by the level last seen in April. Next, the market participants would aim for the high of April 9 at 0.9281
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.39061 and 1.39397.
- Support line of 1.37973 and 1.37637.
Commentary/ Reason:
Sterling little changed against the dollar, last stood at $1.38683, pulling back from a 2-week low touched overnight.
The pound traded cautiously as the British economic calendar is all set to entertain the traders later today, with the GDP figures for the Q2 2021. Also increasing the importance of that time are monthly GDP figures for June, Trade Balance, Manufacturing Production and Industrial Production details for the stated period.
Given the latest COVID-19 resurgence and variant fears in the UK, today’s British data dump will be the key to gauge the economic recovery. Also highlighting the importance of the data is the latest shift in the BoE policymakers’ bias.
