INTRADAY TECHNICAL ANALYSIS 20 SEPTEMBER (observation as of 06:45 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.17513 and 1.17628.

-        Support line of 1.17055 and 1.16940.

Commentary/ Reason:

  1. In thin trade, owing to holidays in Japan and China, the euro nursed losses from its weakest week in a month, slipping to touch a four-week low, and last traded at $1.17160.

  2. The euro came under pressure after speculation on Friday that the ECB will maintain record-low interest rates for longer after the ECB said that a Financial Times report published Thursday "that a lift-off of interest rates could come already in 2023 is not consistent with our forward guidance."

  3. The euro is also weighted in part on uncertainty ahead of Germany's election this weekend.

  4. Intraday bias in EUR/USD remains on the downside as fall is extending. A break will resume the fall to 1.1705, and to 1.1694 key support next.

  5. On the upside, above 1.1751 minor resistance will turn bias back to the upside for 1.1762.

  6. There are no major earnings releases in Europe on Monday, but data releases include U.K. house price data for September and German producer prices for August.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.93379 and 0.93586.

-        Support line of 0.92965 and 0.92758.

Commentary/ Reason:

  1. The dollar’s strength was pronounced against the safe-haven Swiss franc, rose to hit a three-month high early on today.

  2. The dollar last bought at 0.92659 to the franc.

  3. The Swiss franc extended its third day consecutive losses against the U.S. dollar as the less risky currency continued to be hit by the strengthening greenback following strong economic data and as traders awaited guidance from the U.S. Federal Reserve regarding the bond-buying programme.

  4. The FOMC’s 2-day policy meeting is due to be held on Sept. 21-22 and could provide clues as to when the U.S. central bank will start withdrawing its asset purchases. Reduced central bank stimulus tends to lift bond yields, which also helps boost the dollar.

  5. The USD/CHF is moving closer to the 0.9337 resistance line after breaking the previous resistance area, as strong bullish momentum has begun to drive the rally. Today’s trading will determine the conviction of buyers and a break would complete a full price recovery. Momentum indicators suggest that the pair is oversold.

USDCHF

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.37630 and 1.37805.

-        Support line of 1.36930 and 1.36755.

Commentary/ Reason:

  1. Sterling is pressured toward new trough, slipped to $1.36952, a three-week low.

  2. Traders await the outcome from the U.S. Fed and Bank of England meetings this week to decide their next course of action.

  3. An expectation of imminent asset purchase reductions from the Fed lend support to the dollar.

  4. While the Bank of England is expected to leave policy settings unchanged, but traders see potential for gains in the currency if the bank adopts a hawkish tone or more members being calling for asset purchase tapering.

  5. The GBP/USD pair has begun to sell-off, and the pair may continue falling as selling activity has risen in recent trading. A target exists at the 1.3693 and 1.3675 support lines where previously, bullish rebounds have taken place. Momentum indicators have begun to turn bearish with MACD breaking the zero line.

GBPUSD