INTRADAY TECHNICAL ANALYSIS 30 NOVEMBER (observation as of 05:40 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:
The euro was about flat at $1.12990, off Monday's week high at $1.1335.
Fears eased that the new Omicron coronavirus variant would halt recovery. ECB policymakers sought to reassure investors rattled by the new variant, arguing that the eurozone's economy had learned to cope with successive waves of the pandemic.
German consumer price inflation however rose further in November to hit another record high, data showed on Monday, increasing pressure on the ECB to react. The latest reading on eurozone inflation data due on Tuesday later today, expected to show a rise to 4.5% in November from 4.1% in the previous month.
The EUR/USD has recovered from the recent price floor yet has been unable to make any significant attempts at a break of the 1.131 resistance line. Overall, longer-term sentiment is bearish and despite previous attempts at rallies, sellers have continued to dominate price action.
[USDCHF]
Important Levels to Watch for:
- Resistance line of 0.92768 and 0.93164.
- Support line of 0.91976 and 0.91580.
Commentary/ Reason:
The dollar pulled 0.10% lower against the Swiss franc on Tuesday, traded at 0.92170 franc.
The Swiss franc holds on to its safe-haven appeal, traded slightly higher against the U.S. dollar in cautious trading as traders digested news of the Omicron variant of COVID-19. The pair ended flat against in Monday’s close amid uncertainties surrounding the market and growing concerns over the global economic outlook.
The USD/CHF has plummeted back towards the 0.919 support level. Selling pressure has continued in recent trading where price action has now become subdued, and a break is yet to materialise. Price action looks set to be contained within the current trading range until fundamentals drive another move.
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 114.199 and 114.765.
- Support line of 113.067 and 112.501.
Commentary/ Reason:
The dollar slipped 0.30% to 113.259 yen, after dropping to 112.992 on Monday, a two-weeks low.
The Japanese yen held onto gains after PM Fumio Kishida announced that Japan will suspend all new entries by foreign nationals starting Nov. 30 following the discovery of the Omicron variant. The Japanese currency previously jumped as much as 2%, being the biggest beneficiary of the flight to safety trade on Friday.
Although the yen remained close to multi-year lows amid widening policy divergence between Japan and the U.S., with the Fed signalling a hawkish stance, while the BoJ repeatedly stated its commitment to retain easy monetary policies to achieve its 2% price stability target.
[GBPUSD]
Important Levels to Watch for:
- Resistance line of 1.33740 and 1.34250.
- Support line of 1.32720 and 1.32210.
Commentary/ Reason:
Sterling was marginally higher at $1.33211, not far off its weakest level since December 2020 at $1.32787 touched Friday.
The sharp decline in the U.S. Treasury bond yields on Monday weighed on the greenback and helped GBP/USD limit its losses.
The currency was on edge as investors prepared to see if the Omicron coronavirus variant would really derail a nascent reopening of economies around the world and the tightening plans of some central banks.
Although markets were a bit calmer compared to the sell-off last Friday as investors waited on more data to assess the extent of its impact.
Doubts arose on whether the Bank of England will raise interest rates at its December meeting.
The GBP/USD pair has lingered at the 1.331 level, with a lack of conviction from both buyers and sellers. New developments in fundamentals are the most likely to have significant effects on price action.
