INTRADAY TECHNICAL ANALYSIS 20 DECEMBER (observation as of 06:50 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.13282 and 1.13613.

-        Support line of 1.12208 and 1.11877.

Commentary/ Reason:

  1. The euro rose 0.15% to $1.12525, but still on the back foot for the start of the week, having shed 0.85% on Friday to threaten its low for the year at $1.1184.

  2. Euro was lower on Monday as investors shunned riskier assets on concerns about surging global Omicron cases. Rising cases of the new Omicron variant of the coronavirus in Europe and the U.S. clouded the global economic recovery, with thin year-end liquidity also leading to choppy trading.

  3. The dollar meanwhile saw continued support from the outcome of last week FOMC meeting, which fuelled expectations that U.S. interest rates will start rising steadily in early 2022 after the Fed ends its QE program.  The dollar also rose on safe-haven demand due to weakness in stocks.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.92561 and 0.92855.

-        Support line of 0.91609 and 0.91315.

Commentary/ Reason:

  1. The greenback slipped slightly against the Swiss franc, to last traded at 0.92334 franc.

  2. The Swiss franc holds on to its safe-haven appeal in cautious trading as traders digested news of the Omicron variant of COVID-19.

  3. Much volatility was seen in USD/CHF since last week, but no progress was made.

USDCHF

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 114.080 and 114.356.

-        Support line of 113.190 and 112.914.

Commentary/ Reason:                                        

  1. The Japanese yen traded at 113.449 per dollar, stronger than levels above 114 seen against the greenback last week.

  2. The Japanese yen hold its safe haven status, but still near the middle of the trading range of the past three weeks.

  3. Divergent monetary policies continued to influence the currency’s movement, on hawkish Fed against the BoJ ultra-loose policy.

  4. The USD/JPY pair continues to fluctuate inside the sideways range between 113.19 support and 114.08 resistance, to keep the bearish bias suggested on the intraday basis until the price confirms surpassing one of these levels followed by detecting its next targets clearly.

USDJPY

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.32577 and 1.32837.

-        Support line of 1.32057 and 1.31797.

Commentary/ Reason:

  1. Sterling was down at $1.32178 as Omicron worries erased all the gains made following the Bank of England's surprise rate rise last week. The BoE surprised markets by hiking its main interest rate from a historic low of 0.1% to 0.25% amid mounting inflation pressure.

  2. The British pound however sank after the Britain's health minister declined to rule out the chance of further restrictions before Christmas amid the rapid spread of the Omicron coronavirus variant. U.S. lockdowns likely won’t be necessary, but hospitals may be strained, Biden’s top medical adviser Anthony Fauci said.

GBPUSD