INTRADAY TECHNICAL ANALYSIS 17 AUGUST (observation as of 05:40 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.18032 and 1.18165.
- Support line of 1.17599 and 1.17465.
Commentary/ Reason:
The euro changed hands at $1.17694 against the dollar.
The dollar, which is also often seen as the ultimate safe-haven currency, moved higher after a slide in stocks boosted liquidity demand for the dollar. The dollar also garnered support on report that said several Fed officials said they are nearing agreement on scaling back asset purchases in about three months if the economic recovery continues.
The euro meanwhile weighted on dollar strength and following the decline in the 10-year German bund yield to a 1-week low Monday.
The EUR/USD has moved to test the 1.175 support level after once again. Each attempt at a rally has become gradually weaker as a bearish bias begins to dominate the pair.
Alternatively, respectively around 1.180 and 1.1816, guard the quote’s short-term recovery moves ahead. And if EUR/USD bulls cross the stated resistance line, July’s high near 1.1910 will challenge the further upside.
Data on U.S. retail sales and industrial output due later Tuesday is the next biggest focus for the market.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.91677 and 0.91907.
- Support line of 0.90927 and 0.90696.
Commentary/ Reason:
The Swiss franc held on to latest gains at 0.91342 franc per dollar.
Although the dollar looks to rebound off its 1-week low recorded yesterday.
The USD/CHF sold off at the start of the week, breaking last week’s bullish momentum. Price action will now head back towards the 0.909 support level. Momentum indicators signal a stall in bearish momentum and a shift in direction, with MACD testing the zero line.
However, although the Swiss Franc’s safe-haven appeal backs the USD/CHF sellers during the risk-off mood, the latest chatters over the Fed’s tapering and comparatively upbeat fundamentals have helped the U.S. dollar to remain firm during the uncertain times.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.39017 and 1.39547.
- Support line of 1.37957 and 1.37427.
Commentary/ Reason:
Sterling was on the defensive at $1.38257 on Tuesday, as market participants waiting for UK employment figures.
The declining trend of new COVID-19 cases in the UK, along with the end of pandemic-related restrictions and the BoE's hints about modest tightening acted as a tailwind for the sterling and helped limit the downside for the GBP/USD pair.
The GBP/USD pair is hugging the descending trendline downwards as a longer-term bearish trajectory take hold for the pair. Several tests of the trendline have contained price action and therefore a consolidation channel appears to be forming between the 1.390-1.379 price levels.
The UK will publish employment-related data on Tuesday, focus on unemployment. While the U.S would be focusing on U.S. retail sales data, which may offer clues about U.S. consumption and might determine the behaviour of the dollar in the next few days.
