INTRADAY TECHNICAL ANALYSIS 26 NOVEMBER (observation as of 06:45 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.13150 and 1.13765.

-        Support line of 1.11920 and 1.11305.

Commentary/ Reason:

  1. The euro rose 0.16% to $1.12239, stabilizing after hitting its lowest level in nearly 17 months earlier in the week at $1.11863. The pair is now headed for 0.65% weekly losses.

  2. The euro rebounded above 1.1200 in what seems to be a technical correction of this week's decline. Markets are likely to remain calm for the remainder of the day due to the Thanksgiving holiday in the US and the shared currency could stay resilient against the greenback.

  3. Concern of recent surge in COVID-19 infections in Europe that lead to additional restrictions continue to weigh on EUR/USD.

  4. The greenback meanwhile was supported amid expectations for a faster tapering process and possible rate hikes by the Fed compared to the ECB. Overnight, minutes from the ECB's October meeting showed most policymakers leaning toward continued stimulus and a cautious approach to any policy changes, despite the pressure from heated inflation.

  5. The EUR/USD has stalled at the 1.119 support line and appears to be making a bullish recovery. Small-bodied candles reflect low conviction, and more support will be required to facilitate a rally.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.93546 and 0.93730.

-        Support line of 0.92950 and 0.92776.

Commentary/ Reason:

  1. The dollar pulled 0.40% down against the Swiss franc, last traded at 0.93129 franc, but en route to 1% weekly gains.

  2. Th Swiss franc gained on Friday after the detection of a new and possibly vaccine-resistant COVID-19 variant sent investors scurrying toward the safety of the safe haven, on top of to rising coronavirus cases in Europe.

  3. The U.S. dollar was supported early in the week amid expectations for a faster tapering process and possible rate hikes by the Federal Reserve. The U.S. FOMC meeting minutes indicated that the committee members would not hesitate to address inflationary pressures, implying that the tapering process could be quickened, and a rate hike could happen sooner.

  4. USD/CHF failed to sustain above 0.9367 resistance and retreated after forming a temporary top at 0.9372. July’s high close to 0.9275 will challenge the support.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 115.097 and 115.636.

-        Support line of 113.353 and 112.814.

Commentary/ Reason:                                        

  1. The yen leapt as much as 0.66% to 114.542 per dollar, as concern flared about the B.1.1.529 variant, which might make vaccines less effective.

  2. The dollar, however, was still headed to more than 1.2% weekly gains against the Japanese yen.

  3. Divergent central bank policies continue to undercut the yen. The greenback was supported throughout this week after several U.S. Fed policymakers have said in recent days that they would be open to speeding up the tapering of the central bank's bond-buying programme if the high rate of inflation held, and move more quickly to raise interest rates, an action that is faster compared with the BoJ.

  4. If the COVID situation worsens, then dollar-yen could go down further, but otherwise the monetary policy divergence is definitely going to be weighing on the yen in the medium term.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.33740 and 1.34250.

-        Support line of 1.32720 and 1.32210.

Commentary/ Reason:

  1. The British pound slipped to a new 2021 low, last traded at $1.32992.

  2. The safe-haven dollar rallied, as investors ducked for cover following the discovery of a new coronavirus variant that could resist current vaccines.The rising U.S. Treasury bond yields forced GBP/USD to stay pressured.

  3. Meanwhile, ongoing Brexit concerns, with France's pledge to continue its row over fishing rights with the UK, also weighed on the pair.

  4. The GBP/USD pair has moved to test the 1.327 price line. Despite a stall represented in yesterday’s session, sellers have continued to dominate. Although the bearish channel keeps sellers hopeful, MACD and RSI conditions signal a corrective pullback targeting the channel’s upper line near 1.3374.

GBPUSD