INTRADAY TECHNICAL ANALYSIS 3 SEPTEMBER (observation as of 05:40 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.18876 and 1.19044.

-        Support line of 1.18331 and 1.18162.

Commentary/ Reason:

  1. The euro traded at $1.18762, hovered just below $1.18841 it touched earlier today, the highest since Aug. 4.

  2. The euro was supported on signs of faster producer prices pressures in the Eurozone, which is hawkish for ECB policy.

  3. Markets start to react to the potential for more sustained Eurozone inflation and reduced stimulus from the ECB. On Wednesday, ECB President Christine Lagarde said the euro zone economy was recovering and only needed "surgical" support targeted at sectors that still struggle.

  4. EUR/USD bulls burst into critical resistance ahead of NFP. The U.S. central bank has made a labour market recovery a condition for paring pandemic-era asset purchases. A weaker-than-expected reading may aid the dollar.

  5. Resistance is at the fresh September high around the 1.1887, a level that also held the pair back in early August. The next noteworthy cap will be at 1.1904, around July's high point.

  6. Support is at 1.1833, which provided support a month ago, followed by around 1.1816.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.91703 and 0.91837.

-        Support line of 0.91268 and 0.91133.

Commentary/ Reason:

  1. The dollar extends pullback from intraday low to stand at par around 0.91420 franc ahead of Friday’s European session.

  2. The USD/CHF pair keeps fluctuating inside the sideways range that appears on the chart, between the 0.9126 and 0.9113 support and 0.9170 and 0.9183 resistance, thus, no change to the intraday sideways move scenario, noting that breaching one of the mentioned levels is required to detect the next trend clearly.

  3. Friday nonfarm payroll report is awaited by traders. Fed’s Powell suggested an improvement in the labour market is one major remaining prerequisite for the Fed to taper its asset purchases.

USDCHF

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.38600 and 1.38887.

-        Support line of 1.37673 and 1.37387.

Commentary/ Reason:

  1. Sterling last sat at $1.38344, jumped to its highest in 3-week on the softer dollar.

  2. The pound opened higher against the U.S. dollar on Thursday as investors remained cautious ahead of the U.S. economic data disclosure. The dollar has been on the back foot since even before then as doubts about the tapering timeline crept in. Investors are likely content to play the range in the major currency space while waiting for the US non-farm payroll data which is due to be released tomorrow.

  3. The GBP/USD pair resumed its positive trading clearly to approach the intraday bullish channel’s resistance line, reinforcing the expectations of continuing the bullish trend, which targets 1.386 as a next station, noting that breaching this level will extend the bullish wave to reach 1.3888.

GBSPUSD