INTRADAY TECHNICAL ANALYSIS 1 NOVEMBER (observation as of 07:00 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.16542 and 1.16918.

-        Support line of 1.15326 and 1.14950.

Commentary/ Reason:

  1. The euro was about flat at $1.15552, staying close to Friday’s low of $1.15352, the weakest since Oct. 13.

  2. The dollar rallies from the recent acceleration of market expectations for Fed rate hikes by late 2022. The FOMC widely expected to announce a tapering of stimulus on Tuesday.

  3. The euro zone economy has boomed over the summer with an ECB survey on Friday showing expected growth of 4.5% in 2022, but inflation is also blowing past expectations, leaving the ECB with a growing policy headache.

  4. The EUR/USD sell-off in the previous trading session was halted at the 1.153 support line. This price floor has held despite several recent tests. In the current trading session price action has pulled away from the support line indicating it may remain intact. Momentum indicators remain bearish.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.91933 and 0.92260.

-        Support line of 0.90872 and 0.90544.

Commentary/ Reason:

  1. The dollar was higher against the Swiss franc on Monday, rose 0.15% to trade at 0.91663.

  2. Expectation of stimulus tapering by the U.S. Fed in its monetary policy on Tuesday keeps the dollar underpinned.

  3. On the other hand, the Swiss franc losing momentum on its safe-haven appeal. The risk-on impulse in the market on Monday weighted on the safe-haven Swiss franc.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 114.340 and 114.598.

-        Support line of 113.506 and 113.248.

Commentary/ Reason:                                        

  1. The dollar remains on the front foot against the Japanese yen, bought 114.300 yen, a 0.30% rise to touch a new one-week high.

  2. The safe-haven Japanese currency weakened as reduction in political uncertainty is playing out. Japan PM Kishida showing a surprisingly comfortable election win on Sunday.

  3. U.S. stimulus hopes, as well as Fed tapering concern underpin U.S. Treasury yields, to lend support for the dollar.

  4. The USD/JPY pair looks set to continue oscillating within the 113.50 and 114.34 price levels as the range has contained price action in recent trading. Another test of the 114 ceiling appears to be imminent but the current lack of conviction from buyers makes a break appear to falter. 

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.38274 and 1.38900.

-        Support line of 1.36246 and 1.35620.

Commentary/ Reason:

  1. Sterling weakened slightly to $1.36663, dipped for the first time since mid-October.

  2. Sterling slipped to a two-week low of $1.3663 as traders reckon a small rate hike might come with a dovish outlook. The BoE is to announce its policy decision on Thursday.

  3. The pound also weighted as Britain and France clashed again in a post-Brexit fishing row on Sunday, with London denying it had shifted its position and Paris insisting it was now up to Britain to resolve a dispute that could ultimately hurt trade.

  4. The GBP/USD pair continues to oscillate lower, with subsequently lower highs on each oscillation. A moderate downtrend is established yet, price action has so far failed to break out of the current range with a price floor at the 1.362 price level. Momentum indicators have turned bearish.

GBPUSD