INTRADAY TECHNICAL ANALYSIS 23 AUGUST (observation as of 06:45 UTC)
[EURUSD]
Important Levels to Watch for:
- Resistance line of 1.17730 and 1.18058.
- Support line of 1.16668 and 1.16340.
Commentary/ Reason:
The euro appreciated 0.14% to $1.17155, off Friday’s 9-1/2-month trough of $1.16640.
The dollar posted modest losses Monday after stocks rebounded from last week losses and moved higher. The need for an early start to tapering meanwhile giving the dollar a support on the euro. That is in marked contrast to the ECB which is under pressure to add more stimulus.
The EUR/USD pair is holding the higher ground, amid correction in the U.S. dollar. The immediate target of the relief rally is 1.177, where some resistance can be seen. However, the next key level is the 1.1800 mark and the 200-period SMA. This is the key area that determines the trend bias of the pair. A sustained rally beyond the 1.1800 level can shift the bearish bias to the bullish trend.
The main theme for the EUR/USD this week will be the virtual Jackson Hole symposium. This is a summit where global central bankers gather in Wyoming to share ideas about the state of the economy. The summit tends to move key currency pairs because of the speeches from central bank governors and other officials. This year’s summit will be held virtually because of the pandemic.
Meanwhile, attention is now turning to the preliminary PMI reports for the manufacturing and service sectors in the Eurozone to better understand the bloc’s economic recovery.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.91900 and 0.92111.
- Support line of 0.91478 and 0.91267.
Commentary/ Reason:
The dollar eased slightly on Monday, to trade at 0.91661 franc.
The dollar tailwinds are likely be limited ahead of the U.S. Fed Jackson Hole conference, which is scheduled for Aug 26 to 28, 2021. If the picture of earlier-than-expected tapering of asset purchases by the Fed appears from the symposium, the U.S. dollar might strengthen and exert downward pressure on the Swiss franc.
The dollar has been buoyed this month by a flight to safety as a surge in the fast-spreading Delta variant threatens to derail a global economic recovery, at the same time as the Federal Reserve is signalling a tapering of stimulus as soon as this year.
USD/CHF stayed in established range last week and the near-term outlook is mixed. Initial bias remains neutral on Monday. On the upside, break of 0.919 resistance should resume the rise towards the 0.921. On the downside, a break will target 0.914 support first. Further break there will likely resume the decline to 0.912 low.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.38072 and 1.38731.
- Support line of 1.35941 and 1.35282.
Commentary/ Reason:
Sterling added 0.22% to $1.36504, up from a 1-month low of $1.36019 at the end of last week.
The GBP/USD pair decline stopped at the support base 1.35, as bullish rebound took place. Buyers have returned in early trading indicating price action will once again be contained within the current range. Momentum indicators are bearish, with RSI testing the oversold line.
The sterling continued to struggle against the greenback on risk-aversion. The strengthening of the U.S. dollar also had put pressure on the oil prices, with the oil benchmark Brent crude currently trading at around $66 per barrel.